Preamble

The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.

PRIVATE BUSINESS.

Ayr Burgh (Electricity) Bill [Lords] (by Order),

Second Reading deferred till Tomorrow.

Buckhaven and Leven Gas Commission

Order Confirmation Bill (by Order),

Consideration deferred till Thursday, at a quarter-past Eight of the Clock.

Oral Answers to Questions — INDIA.

IMPRISONED AGITATORS (BURMA).

Colonel WEDGWOOD: 1.
asked the Under-Secretary of State for India how many agitators, political or otherwise, are imprisoned on account of their agitation in Burma; how many of these are Burmese; and how many Indian?

The UNDER-SECRETARY of STATE for INDIA (Earl Winterton): I am unable to supply the hon. and gallant Member with the figures asked for, and would refer to the reply given him on the 22nd February last. But I have no reason to think that the number is more than six or seven, if so many. The Government of India were consulted, as promised in that reply, but their answer has not yet been received.

ADMINISTRATION (COST).

Colonel Sir C. YATE: 2.
asked the Under-Secretary of State for India, if he can now give a Return showing the difference between the cost of administration of the Central and Provincial Governments in India before and after
the introduction of the reforms under the Government of India Act of 1919?

Earl WINTERTON: I much regret the delay which has occurred in supplying the hon. and gallant Member with these figures. I received certain figures from the Government of India in March last, but as it appeared that they had not been prepared on a uniform basis and would therefore have been misleading, I had to telegraph asking for their revision, which has involved a reference to several provinces. I can assure the hon. Baronet that the matter has not been overlooked and that I will furnish the figures as soon as possible.

CIVIL SERVICE (PENSIONS).

Mr. HOGGE: 3.
asked the Under-Secretary of State for India why the concession of proportionate pensions is not given to officers of the Indian Medical Service in permanent civil employment; and why such officers do not receive the same privileges and concessions as have been, or may be, accorded to other civil officers as a result of the detriment to their prospects and the altered conditions of service resulting from the reform scheme?

Earl WINTERTON: Officers of the Indian Medical Service in permanent civil employment are permitted to retire on proportionate pensions if they are unable to be re-employed in military duties to which, under the terms of their appointment, they are always liable to recall. I am in correspondence with the Government of India in regard to the applicability of these conditions to officers who, by reason of the length and nature of their civil employment, have had a reasonable expectation of continuance therein up to the time of their normal retirement.

Mr. HOGGE: Can the Noble Lord say when he expects some reply or decision about this matter?

Earl WINTERTON: I hope shortly. It is an important matter which requires consideration.

Mr. HOGGE: 4.
asked the Under-Secretary of State for India what steps he proposes to take to remove the grave fears as to the security of their pensions which have caused the European officers in Government services in India to form associations for the protection of their
interests and to memorialise the Secretary of State on this and other associated matters?

Earl WINTERTON: I can add nothing to what was said on this subject in paragraphs 3 and 4 of a despatch from the late Secretary of State, dated the 9th February last, which was presented to Parliament, and a copy of which I will send to the hon. Member.

Mr. HOGGE: 6.
asked the Under-Secretary of State for India why an arbitrary limit of time was fixed after which no proportionate pension could be, claimed; and whether he is aware that the effect of such a limit is to compel the retirement of a considerable number of officers before that date and before they would otherwise retire?

Earl WINTERTON: I would refer the hon. Member to my observations on this matter in the course of the Debate on the India Office Vote on Thursday last but I might say in amplification that an arbitrary date was first fixed, because it is clearly not an ideal condition in the public service that its members should be able at any time to claim to retire on pension at short notice. On the other hand, it has now become apparent that if the date in 1924 originally fixed is adhered to, many officers will not be sufficiently assured as to future conditions by that time, and will therefore retire while the opportunity is open. It has therefore been decided that the opportunity must be kept open for a considerable additional period, and, as I said on the 15th, a definite announcement on the subject will be made shortly.

Mr. HOGGE: Is there any decision being come to with regard to these civil servants which can be announced all at once, or are the points raised in these memorials being taken separately?

Earl WINTERTON: I am afraid I do not quite understand the hon. Gentleman's question. He refers in his question on the Paper to the arbitrary limit of time after which no proportionate pension can be claimed. I referred to that in ray speech last week, and I have endeavoured to amplify that reply to-day.

ARMY PAY AND PENSIONS.

Sir C. YATE: 5.
asked the Under-Secretary of State for India whether the views of the Government of India have now been received on the question of the adjustment of the pay and pensions of those officers of the Indian Army who were retained in the Army on account of the War beyond the date on which they became due to be placed on the retired list; and, if so, can he make a statement of the subject?

Earl WINTERTON: The Government of India's views have now been received and are under consideration. I cannot promise an immediate decision, as further correspondence will probably be necessary, but will do my best to expedite it.

Sir C. YATE: Can my Noble Friend give me any time at which I can put down a question?

Earl WINTERTON: I will notify my hon. and gallant Friend privately when it is possible to give an answer.

Oral Answers to Questions — BRITISH ARMY.

IRISH REGIMENTS (DISBANDMENT).

Rear-Admiral ADAIR: 7
asked the Secretary of State for War (1) whether he is aware that the report of the disbandment of a battalion of the Royal Inniskilling Fusiliers, consequent on the retention of a battalion of the Royal Irish Fusiliers, has caused great resentment not only among the people of Ulster, of which nearly every family has given members to this regiment during the past 230 years, but also among the 30,000 ex-soldiers of the regiment living in Ulster, and that they regard the substance of this report as a breach of faith in respect to Army Order No. 78, of 11th March, 1922, which, in enumerating the Irish regiments to be disbanded, clearly indicated that the Royal Inniskilling Fusiliers, the oldest and only original Ulster Regiment, was to be retained intact; whether, in view of this, the subject can be reconsidered;
(2) whether he is aware that the recruiting area of the Royal Inniskilling Fusiliers, an Ulster and Protestant regiment since 1689, comprises three counties, namely, Fermanagh, Tyrone,
and Londonderry, with a combined population of about 360,000, and that the recruiting area of the Royal Irish Fusiliers, a regiment originally raised in the South of Ireland, mainly Roman Catholic, consists of only one county, namely, Armagh, with a population of about 120,000; whether, seeing that as a consequence of this it is easier to recruit two battalions of Royal Inniskilling Fusiliers rather than one of each regiment, the disbandment of the second battalion of the former regiment can be reconsidered;
(3) whether he is aware that the Royal Inniskilling Fusiliers have recruited in their present area for the past 230 years; whether the retention of a battalion of the Royal Irish Fusiliers by the sacrifice of a battalion of the Royal Inniskilling Fusiliers will interfere with the old privilege of an Ulster man to confine his attestation solely to service in the Royal Inniskilling Fusiliers, and not committing himself to service in the Royal Irish Fusiliers or any other regiment; and whether, if the two regiments are to be retained, he will arrange for separate regimental depots as at present?

The SECRETARY of STATE for WAR (Sir Laming Worthington-Evans): I am acquainted with the circumstances of these two distinguished regiments, and with the conditions governing their recruiting and maintenance. The future of these regiments is now receiving my personal attention, and I can assure my hon. and gallant Friend that, in coming to a decision, full consideration will be given to the claims of the regiments concerned, and to such considerations as those which he adduces.

Rear-Admiral ADAIR: Seeing that it is quite easy to recruit six battalions in Ulster, would it not be preferable to retain the second battalions of both the Irish Fusiliers and the Inniskilling Fusiliers, and to disband the English and Scottish battalions, which, it is well known, cannot recruit territorially?

Sir L. WORTHINGTON-EVANS: Then I should get exactly similar questions on behalf of the English battalions concerned.

Rear-Admiral ADAIR: I am referring to the battalions that cannot recruit territorially, which is well known in many cases.

OFFICERS (RETIREMENT).

Major Sir KEITH FRASER: asked the Secretary of State for War whether officers who are badly placed in their regiments as regards age and are never, in consequence of this, likely to be promoted, may be allowed to retire on the same terms as officers compulsorily retired under War Office letter of 22nd February, 1922?

Sir L. WORTHINGTON-EVANS: As I have already stated in reply to my Noble Friend the Member for Aldershot, the compensation terms are only for officers whose careers in the Army are compulsorily terminated solely by reason of the reductions in the establishment of the Army.

DISCHARGE REGULATIONS.

Mr. BRIANT: 13.
asked the Secretary of State for War if all soldiers on discharge are entitled to a month's leave on full pay?

The FINANCIAL SECRETARY to the WAR OFFICE (Lieut.-Colonel Stanley): Under the Regulations at present in force, any soldier who is transferred to the Reserve, or who is discharged on the termination of his engagement and not for misconduct or physical unfitness may be granted 28 days' leave on full pay if this leave can be taken before the date on which he is due for such transfer or discharge.

Captain Viscount CURZON: Is this leave in all cases possible where men come home from India who have been kept out there compulsorily for about a year over their time?

Lieut.-Colonel STANLEY: Every attempt is made to give leave where it can be taken before the date of transfer or discharge.

Viscount CURZON: In other cases, is some advantage given to the man in lieu of the 28 days' leave?

Lieut.-Colonel STANLEY: No. This is not a right of the man, but a privilege.

ARTILLERY PRACTICE (WRITESAND BAY).

Mr. FOOT: 14.
asked the Secretary of State for War whether it is proposed to set aside a portion of Whitesand Bay, near Plymouth, for gun practice; and whether he will withdraw this proposal,
having regard to the detrimental effect these operations would have upon the local fishing community, particularly the fishermen of Looe and Polperro?

Sir L, WORTHINGTON-EVANS: I am making inquiry of the local military authorities.

Oral Answers to Questions — CHILDREN'S HOLIDAY CAMPS (MILITARY FACILITIES).

Mr. BRIANT: 12.
asked the Secretary of State for War why organisations for providing holiday camps for children attending elementary schools are refused the use of unoccupied military redoubts and similar buildings, whilst this privilege is granted to cadet corps?

Sir L. WORTHINGTON-EVANS: The children in question are not in the same position as the members of recognised cadet corps which are affiliated to units of the Territorial Army. The use of Government grounds by the general public has been found on occasion to entail much expenditure on sanitation and clearance after occupation. I regret that I do not see my way to extend the present privileges in the direction suggested.

Mr. BRIANT: Is the right hon. Gentleman aware that in industrial areas only an infinitesimal portion of the children ever have a holiday in the country or at the Seaside, and that this is almost entirely due to lack of accommodation. In these circumstances, and considering the health of the children, who are to some extent children of the State, cannot the right hon. Gentleman give some further facilities?

Sir L. WORTHINGTON-EVANS: Of course, I sympathise, as the hon. Gentleman does, with these children, but I am afraid I cannot grant the use of military quarters even for that purpose.

Oral Answers to Questions — EX-SERVICE MEN (OVERSEAS SETTLEMENT).

Major BREESE: 15.
asked the Secretary of State for the Colonies what facilities for settlement he can now afford those officers now being retrenched from the Navy and Army who are desirous of settling in the Colonies; can they be
given free or assisted passages for themselves and families; and, if so, can such assistance be given at once?

The PARLIAMENTARY SECRETARY to the ADMIRALTY (Mr. Amery): Schemes for assisted passages and for affording help in other directions, under the provisions of the Empire Settlement Act, are under discussion with various Overseas Governments, and I hope that satisfactory arrangements regarding passages and otherwise will soon be arrived at with certain of those Governments.

Lieut.-Commander KENWORTHY: Is the hon. and gallant Gentleman, in his capacity as Financial Secretary to the Admiralty, considering the point of view of naval officers who have been retrenched?

Mr. AMERY: Certainly.

Major GLYN: 33.
asked the Secretary for Scotland what steps have been taken in Scotland to publish and supply all necessary information regarding the various schemes for overseas settlement with financial assistance that have been devised and agreed to by the British, the Dominion and Crown Colonies Governments; and whether, seeing that in view of the need of certain skilled tradesmen in some of the Dominions the present schemes provide a most favourable opportunity for married men with their families, as also single men and women, to establish themselves in the Overseas Dominions, special arrangements could be made to assist the emigration officials of the Dominions to provide the information through the employment exchanges and also through the agency of parish councils?

Mr. AMERY: I have been asked to reply to this question. Full information regarding the Government scheme for granting free passages to ex-service men has been made available in Scotland, as in other parts of the Empire, through the handbooks of the Overseas Settlement Committee, local employment committees and exchanges, ex-service organisations, etc. No schemes under the Empire Settlement Act have yet been agreed to with any Dominion Government, but full use will be made of employment exchanges and all other suitable agencies to ensure publicity for all such schemes. The Oversea Employ-
ment Branch of the Ministry of Labour possesses the requisite machinery for advertising through employment exchanges or otherwise any opportunities for skilled workmen overseas, which are brought to their notice by Dominion or Colonial Governments.

Mr. MARRIOTT: Will that information be available at the Post Offices?

Mr. AMERY: I will consider that. Certain information is available.

Oral Answers to Questions — IRELAND.

KIDNAPPED PERSONS (PETTIGO).

Mr. PENNEFATHER: 16.
asked the Secretary of State for the Colonies whether he can now state the result of the inquiries he has made in regard to the kidnapping from Pettigo of certain loyalists by Free State forces; whether these persons have been released un- injured; if not, where they now are; and who is responsible for their safety?

The SECRETARY of STATE for the COLONIES (Mr. Churchill): I am in communication with the Provisional Government with regard to these men, but am not yet in a position to make any statement.

Mr. PENNEFATHER: Is my right hon. Friend aware that nearly two weeks have elapsed since these men were kidnapped, and does he not think that in this space of time the Government ought to have obtained information as to their safety or otherwise?

Mr. CHURCHILL: I am holding for the time being 14 prisoners taken at Pettigo. They are in Ireland.

Colonel ASHLEY: Will my right hon. Friend insist, when these men are released, that the Provisional Government pay full compensation for their injuries, because they have been captured by the Provisional Government's forces?

Mr. CHURCHILL: I do not think I can answer that question at the present time.

Colonel ASHLEY: Will my right hon. Friend answer it if I put it down at 48 hours' notice? It is a very important point.

Mr. CHURCHILL: I am not prepared to say, until I am better informed of all the circumstances, as to what demand could be made for compensation.

Colonel ASHLEY: If, as stated in my right hon. Friend's answer, he holds the Provisional Government responsible for the capture of these men, surely the Provisional Government ought to pay compensation.

Sir J. BUTCHER: Will my right hon. Friend say why the Provisional Government cannot give an answer as to the illegal action of their troops in less time than a fortnight?

Mr. CHURCHILL: I think this matter might much better be allowed to be adjusted in the course of a few days. I expect these men will be delivered over to us, and then we shall find out what were the circumstances in which they were taken away, and whether there are any grounds for the charges of misconduct against them. I have heard certain charges which are made, and we have to look into all these matters before you can say straight off whether a demand for compensation can be made. I am not prepared now to go any further than to say that I am provisionally holding the men taken at the capture of Pettigo, although it is by no means clear that charges can be formulated against them.

Mr. PENNEFATHER: Are we to understand from what the right hon. Gentleman has said that he is satisfied these men are alive and in safety?

Mr. CHURCHILL: I have never said anything which indicated that. The names have been given to me of four men who were carried off, but I am not clear in each case whether they have been carried off from territory inside the Free State, in which they were domiciled, or whether they were carried off from just over the border. I have no further information.

DISTRESS (IMPERIAL GRANT).

Mr. DEVLIN: 24.
asked the Secretary of State for the Colonies what steps he proposes to take to ensure the impartial administration of the money voted by Parliament for the relief of distress in accordance with the Collins-Craig pact?

Mr. CHURCHILL: I see no reason, whatever, to doubt the assurances given
me by Sir James Craig that the money promised by the Government for relief of distress in Belfast is being administered with impartiality. At the same time the British Government countersigned the Agreement in question and is, therefore, bound to form its own judgment for the information of the House as to how far effect has been given to its terms. For this purpose I have instructed an experienced public official to proceed to Belfast and to inquire and report to me upon the extent to which effect has been given to the Agreement. The officer selected for this purpose is Mr. S. G. Tallents, C.B., who at one time represented the British Government with marked ability at Riga. In order to make his services available, Mr. Tallents has been detached from the post he has since filled as Private Secretary to the Lord Lieutenant.

Mr. DEVLIN: Was it not part of the Agreement that there should be an equal number of Catholics and Protestants on the Committee to distribute this money which has been voted by the Imperial Government?

Mr. CHURCHILL: No, Sir, I do not think that is so.

Mr. DEVLIN: I think it is so.

Mr. CHURCHILL: No, Sir. There were two Committees, as far as my recollection serves me. One was to investigate cases and the other to assist in the formation of a new joint police force. This money was to be distributed on certain principles and in certain directions, but, as far as my recollection goes, there was no such arrangement as the hon. Member mentions.

Rear-Admiral ADAIR: How much money has been allocated for this purpose?

Mr. CHURCHILL: Under the agreement of 31st March, £500,000 was to be granted by the British Exchequer for the relief of distress in Belfast, of which two-thirds was to go to Protestants and one-third to Catholics.

Rear-Admiral ADAIR: How much has been allocated by the Government for the relief of Protestants driven out of the South of Ireland?

Mr. CHURCHILL: That has nothing to do with the question or with the supplementary question.

Mr. DEVLIN: Do I understand that £350,000 is to be devoted to those who drove the Catholics out and £150,000 to the Catholics who were driven out?

Mr. CHURCHILL: I think that is an extremely one-sided manner of summing up the causes of the difficulties at present arising in Belfast.

ROYAL IRISH CONSTABULARY.

Sir J. BUTCHER: 25.
asked the Secretary of State for the Colonies whether a pensioner of the Royal Irish Constabulary who accepts a position in the Colonial police or the Indian police will have any deduction made from his pension or his pay?

Mr. CHURCHILL: I would refer the hon. and learned Member to the provisions of Clause 1 (3) of the Constabulary (Ireland) Bill, which provides that if any officer or constable to whom a compensation allowance has been awarded takes service in any police force, the allowance may be suspended in whole or in part so long as he remains in such force. I am in communication with the Treasury as to the scope of this provision.

Sir J. BUTCHER: Will the right hon. Gentleman consult the law officers as to whether the Indian and Colonial police forces are police forces within the meaning of the Section to which he refers?

MURDERS (MACROOM).

Captain Viscount CURZON: 26.
asked the Secretary of State for the Colonies whether the three officers and one soldier murdered at Macroom were employed on service when they were captured; and whether the Government, either individually or in concert with the Provisional Government, are going to take any further steps to catch the murderers and avenge the death of these gallant soldiers?

Mr. CHURCHILL: These officers and the soldiers with them were not on any special duty when they were kidnapped. In reply to the latter part of the question, the Provisional Government is continuing its inquiries into the matter, but I regret that they have hitherto not been able to trace the persons responsible for this outrage. With regard to the future steps which can be taken, I wish dis-
tinctly to state that neither in this case nor in the case of any other servants or ex-servant of the Crown murdered in South Ireland since the signature of the Treaty will the British Government relinquish its efforts to secure the apprehension and punishment of the guilty persons. It would be quite impossible for the Irish Free State to retain the position of a civilised Government unless it were to make untiring exertions to secure the apprehension and punishment of persons guilty of having broken the solemn pact entered into between the representatives of the two countries by treacherous and brutal assassinations. There can be no question of drawing a veil over these events.

Sir W. DAVISON: Has the attention of the right hon. Gentleman been drawn to the letter from the father of one of these murdered officers in Monday's "Times" stating they were seen to enter an inn at Macroom and that they never came out again, and that., if no one has been arrested, it is not for want of clues, but because there is no machinery of law and order in the district?

Mr. CHURCHILL: I have read the letter. It is, no doubt, true there has been no machinery of law and order in the district, up to the present. I trust as the time passes law and order will regain authority. Then will be the time when inquiry can be made and evidence gone into, and when, I trust, the guilty parties will he brought to justice.

Sir W. DAVISON: Can the right hon. Gentleman not inform the House whether the innkeeper, or some persons living in the have been interrogated as to what happened to the officers after entering the premises?

Mr. CHURCHILL: I certainly cannot at the present time. I have said the district at present is not under the effective control of the Provisional Government. I have no means or methods of making inquiries other than those which have already been conducted.

Sir W. DAVISON: How long is this to be permitted to go on?

Mr. CHURCHILL: I have given the hon. Gentleman answers to his questions. I should have thought he would have accepted them.

SPECIAL CONSTABULARY (ULSTER).

Mr. DEVLIN: (by Private Notice)
asked the Secretary of State for the Colonies whether his attention has been called to, the acts of the Special Constabulary holding up the motor car in which His Eminence Cardinal Logue and His Grace the Archbishop of Dublin were travelling to Armagh after administering confirmation last Thursday; whether the car was pulled up by the Specials who demanded the chauffeur's licence, which he immediately produced, informing them that the passengers he was driving were Cardinal Logue and the Archbishop O'Donnell; whether the leader of the Specials ordered the Cardinal and the Archbishop to get, out on the roadside and be searched, which they did, after which they were-searched, their bags also searched; whether the pockets of the car were-searched, the cushions lifted and the bonnet of the engine scrutinised and the chauffeur ordered to take off the spare wheel. Whether this is the third occasion in three months that Cardinal Logue and his coadjutor Archbishop have been submitted to similar indignities; and whether in view of the repeated declarations made on behalf of the Northern Government that these insults were committed against their explicit instructions and in opposition to their orders, steps would be taken to have the Special Constabulary suspended, and what action he proposed to take to put an end to these constant and recurring outrages against distinguished ecclesiastics in the pursuit of their religious duties?

Mr. CHURCHILL: The incident referred to by the hon. Member, came to my knowledge on the 16th instant, and I immediately asked the Secretary to the Government of Northern Ireland for a report on the subject. His reply, received yesterday, was in the following terms:
I received your wire about Cardinal Logue's car, but as the Constabulary Authorities were making inquiries, news came in of five Unionists murdered in that district this morning, and all of the former inquiries are necessarily postponed. In any case the matter does not seem of outstanding importance. Both the Prime Minister's car and the cars of the highest Protestant ecclesiastical and judicial dignitaries have been searched without protest. We ore trying to stamp out murder, and no citizen need object to a little inconvenience caused by measures to this end.
I have for the moment no further information to add to this reply.

Mr. DEVLIN: Does the right hon. Gentleman, as paymaster of these Special constables, really think that is a serious answer to give to the House? Has he not himself stated at the Treasury Box repeatedly that he resents and regrets these indignities put upon ecclesiastics? Is it suggested by implication that these ecclesiastics were in any way responsible, directly or indirectly, for the things he quotes in his answer?

Mr. CHURCHILL: I gave an answer on this subject which is correctly described by the hon. Gentleman, in which I expressed regret at this kind of events happening, but I should have thought that the last possible occasion on which to draw attention to an inconvenience of this kind would be in connection with five or six most horrible murders in Ireland which had convulsed the whole district and which had naturally led to the police being active and vigilant.

Mr. DEVLIN: I agree with the right hon. Gentleman in denouncing these horrors, but similar horrors had occurred three or four days before, and these were, I understand, reprisals. My main point is that these distinguished dignitaries were attacked on two separate occasions before there were any murders, and Cardinal Logue, a venerated ecclesiastic, 83 years of age, was stopped and a pistol held at his head—

Sir J. BUTCHER: On a point of Order. Is an hon. Member, under the guise of a question, entitled to make a most provocative speech?

Mr. DEVLIN: He is incapable of making a provocative speech.

Mr. SPEAKER: The hon. Member has had a full answer to his original question.

Mr. DEVLIN: With all respect, the right hon. Gentleman has not answered my question at all. What I want to know is what he proposes to do to stop these indignities being put upon these ecclesiastics in the pursuit of their duty. He pays these Special constables, and has the right to determine what is to be done.

Mr. CHURCHILL: I do not think that it would be opportune for me to make any further representation to the Government of Northern Ireland. I have stated, on behalf of the Prime Minister
of Northern Ireland, his regret that anything in the nature of inconvenience or discourtesy should have been experienced by the Cardinal and the Archbishop, but they are travelling about now in districts which are convulsed by excitement—

Mr. DEVLIN: This will make them more excited.

Mr. CHURCHILL: —and they cannot be sure that they may not be subjected to the same sort of interrogatories and examination of their papers as are all other persons there. I think it is inopportune to press a matter like that, in view of the fact that this very district was the scene of these murders.

PRESENT SITUATION (DEBATE).

Sir D. MACLEAN: (by Private Notice)
asked the Secretary of State for the Colonies whether he will make a statement to the House with regard to the situation in Ireland this week?

Mr. CHURCHILL: The House knows that I am not at all disinclined to give it the fullest possible information about Ireland, and, indeed, I think the Government has frequently gained very considerable advantage by the fact of the discussions which have taken place in this House on the Irish question. At the same time, I do feel that the present is not a very opportune moment for a discussion. I feel that one ought to take place before very long, but there are so many uncertain factors at this moment that discussion in this House might very well be prejudicial to the public interest, and, if the House would permit rue, I would ask to be allowed to reserve any statement I might make till a somewhat later period.

Colonel GRETTON: Can the right hon. Gentleman be a little more definite as to the date? The state of Ireland is deplorable. Outrages are taking place every day, and it is very desirable that the House should be fully informed as to what is taking place in Ireland and what measures are being taken.

Mr. CHURCHILL: The Colonial Office Vote is down for next Thursday, but I am sure it would he of no advantage to discuss Ireland then. Provided that it comes round, however, there is an Irish Supply Vote, I understand, still open, and application through the usual chan-
nels, if my right hon. Friend the Leader of the House approves, would undoubtedly enable the House to discuss it then.

Mr. GWYNNE: In view of the fact that questions on Ireland in this House are very difficult, is it not only fair that the House should have an opportunity of getting some explanation from the Colonial Secretary as to what is going on in Ireland, and what definite steps are being taken, seeing that loyalists are being butchered there every day?

Sir D. MACLEAN: Will the right hon. Gentleman take note that I will repeat the question at an early date next week?

Mr. CHURCHILL: indicated assent.

Sir F. BANBURY: In view of the fact that at the beginning of last week we were told that we were going to have a statement on Ireland, first of ail next day, then, as far as my memory serves me, it was put off till the Thursday, then we were told we must wait till this week—possibly a late day in this week—and, now that we were waiting till Thursday, which is the last day, I understand that all we shall have is an opportunity for discussing it on the Colonial Office Vote—[HON. MEMBERS: "No!"] Then, in those circumstances, I do think the House should know what is going on and that we should have some explanation of the events that are taking place. I do not wish to insinuate for one moment that there is not a proper answer to be given by the Government, but I think the Government ought to give an answer, and ought not to say that at some later date, without any date being mentioned, something will be done.

Mr. CHAMBERLAIN (Leader of the House): If it be the desire of the House to have a discussion on Ireland next week, we have no wish to shirk such a discussion. What my right hon. Friend and the Government are anxious for is to avoid an incomplete discussion, which settles nothing, where the statements cannot be conclusive, and may be mischievous because of the uncertainties of the situation at the moment. If, however, it be the desire of the House to take an Irish Vote next week for the purpose of discussing the Irish situation, I will make arrangements
accordingly. I am sure the House will recognise that, as my right hon. Friend has said, he has never shown the slightest desire to shirk discussion. When we are in the position, not of agreeing to or of refusing, but of choosing a day for discussion, we are not actuated by any desire to conceal information from the House or to shelter ourselves, but solely by the desire that discussion in the House should do no mischief, and should be as useful and informative as it can be.

Mr. HALLS: Is it the fact that during the Whitsuntide Recess, when there was no discussion in this House and when no questions were being put, there was more peace in Ireland than there has been during the period when this campaign has been carried on in this House?

Mr. CHURCHILL: I do not think the two events had the slightest relation to one another.

Mr. T. P. O'CONNOR: When the time comes for the discussion of the lamentable state of affairs in the North of Ireland, will the Colonial Secretary, in deploring and describing the horrors that have taken place in the North of Ireland, and particularly in Belfast—horrors of which I have an equal abomination with himself —take care to describe the horrors not merely on one side, hut on both sides?

Mr. CHURCHILL: I will endeavour to do full justice.

Oral Answers to Questions — KENYA COLONY.

Mr. R. RICHARDSON: 17.
asked the Secretary of State for the Colonies whether he has yet received information as to the area of lands in native occupation in Kenya Colony alienated to white men since 1914?

Mr. CHURCHILL: I regret that the return has not yet reached me.

Mr. RICHARDSON: 22.
asked the Secretary of State for the Colonies whether the Draft Ordinance amending the compulsory Labour Ordinance in Kenya Colony has now been received and whether this will be laid upon the Table of the House?

Mr. CHURCHILL: Draft Amending Ordinances have been received from
Kenya and Zanzibar and will be considered with the Uganda Draft Ordinance when it is received. With regard to the latter part of the question, I would invite the hon. Member's attention to my reply to the hon. and gallant Member for Newcastle-under-Lyme on the 16th of May.

Oral Answers to Questions — HONG KONG (TREATMENT OF CHILDREN).

Lord H. CAVENDISH-BENTINCK: 18.
asked the Secretary of State for the Colonies whether the mui tsai system of Hong Kong is in existence in any other and, if so, which dependency or dependencies of the Crown?

Mr. CHURCHILL: I find that the mui tsai system is in existence in Malaya among the Chinese immigrants and colonists, and the Governments of the Straits Settlements and of the Federated Malay States are being requested to send full reports on the conditions under which it prevails. I am not aware of the prevalence of the system elsewhere in the Empire, but it probably exists to some extent wherever there is a considerable community of Chinese. If on inquiry from the Governor it is found that, the incidents attaching to the institution and ether local circumstances are the same as prevail in Hong Kong, I propose to follow a similar course to that which I adopted in that case.

Oral Answers to Questions — SOUTHERN RHODESIA (LAND OWNERSHIP).

Lord H. CAVENDISH-BENTINCK: 19.
asked the Secretary of State for the Colonies whether his attention has been drawn to the statement of the chief native commissioner of Southern Rhodesia that the number of natives in that Protectorate who now own land has reached eight; and whether he proposes to take any steps towards accelerating the process by which the natives of that territory may become tribal or individual owners of alienated or unalienated land?

Mr. CHURCHILL: I have not yet seen the statement referred to. I do not think that it is possible for me to take any
steps in the direction indicated in the second part of my Noble Friend's question. A suggestion that districts should he set aside in Southern Rhodesia in which natives alone might acquire land was considered in connection with the draft Letters Patent, and dealt with in paragraph 10 of my despatch to the High Commissioner for South Africa published in Cmd. 1573.

Oral Answers to Questions — NATIVE POPULATION, MSORO.

Lord H. CAVENDISH-BENTINCK: 20.
asked the Secretary of State for the Colonies whether his attention has been drawn to the statement that the whole native population of Msoro has been removed in order to make room for European occupation; whether he can say how many natives are affected and over what area of land; and what compensation, if any, was made to the people expropriated from their lands?

Mr. CHURCHILL: My attention has recently been called to the matter, but I have at present no information as to the action which is re-ported to have been taken. I am asking the High Commissioner for South Africa for a report by telegraph.

Oral Answers to Questions — BRITISH NORTH BORNEO (GAMBLING RIGHTS).

Colonel WEDGWOOD: 21.
asked the Secretary of State for the Colonies whether he has yet received from the British North Borneo Company any statement showing the amount of money derived by that company from its sale of the monopoly right to organise gambling amongst the Chinese coolies labouring on the plantations in North Borneo?

Mr. CHURCHILL: The British North Borneo Company has now furnished me with the information for which I asked. I understand that the company, in order to restrict gambling, does not put up to auction, but invites tenders for the monopoly and control of the gambling rights throughout the territory and not merely among the Chinese coolies on estates as the hon. Member suggests. The net revenue forthcoming from this source in 1921 was £10,800.

Oral Answers to Questions — PERFORMING ANIMALS.

Sir WALTER DE FRECE: 27.
asked the Secretary of State for the Home Department whether the Government has considered the Report of the Select Committee on Performing Animals; whether, in view of the strong difference of opinion on the whole subject among the Members forming part of this Committee, he proposes to take any action by way of legislation or regulation; and, if so, of what nature?

The SECRETARY of STATE for the HOME DEPARTMENT (Mr. Shortt): I would refer the hon. Member to the answer given on the 14th instant to a question on this subject.

Lieut.-Commander KENWORTHY: Is the right hon. Gentleman aware that the members of the Committee were, at any rate, agreed that something was needed in the way of greater regulation; and could machinery of some sort not be devised?

Mr. SHORTT: The whole matter is under consideration.

Mr. L. MALONE: Will Lord Haldane'e Committee have any powers in this matter?

Mr. SHORTT: I cannot answer that question.

Oral Answers to Questions — PRISONERS (NEWSPAPER ARTICLES).

Mr. MARRIOTT: 29.
asked the Home Secretary whether his attention has been called to the publication in the Press of details concerning the life in gaol, or while under detention at His Majesty's pleasure, of convicted prisoners; if so, by what means such information is obtained; and what steps he proposes to take to put a stop to the communication or publication of such information?

Mr. J. JONES: 28.
asked the Home Secretary if he is aware that reports of interviews with convicted prisoners have appeared in the public Press; and if he is prepared to grant facilities to all convicted prisoners to be interviewed?

Mr. SHORTT: Reports of interviews with convicted prisoners that appear in the Press must not be regarded as necessarily authentic. They sometimes diverge considerably from the truth, and
sometimes are pure inventions. I see no reason at present for any alteration in the rules governing visits.

Mr. MARRIOTT: Will the Home Secretary be kind enough to answer the intermediate portion of my question, namely, by what, means such information is obtained?

Mr. SHORTT: The information is not obtained. It is invented outside.

Mr. MARRIOTT: Does the Home Secretary suggest that there were no such communications made—that they were all invented?

Mr. SHORTT: I have made inquiry. I think I know the particular interview to which my hon. Friend refers, and, so far as I can find out, no such interview took place.

Mr. DEVLIN: Is it not a very good thing that what occurs in the prisons should get out sometimes—information as to how these prisons are conducted?

Oral Answers to Questions — EMPLOYMENT OF WOMEN ACT, 1920.

Colonel PENRY WILLIAMS: 30.
asked the Home Secretary whether any Orders have been made under the Employment of Women, Young Persons, and Children Act, 1920; if so, when will they come into operation; to what industries they apply; what is approximately the number of people who will be thrown out of employment thereby; and what provision will be made for their maintenance?

Mr. SHORTT: A number of Orders have been made under the Act, some under Section 2 permitting the adoption of the two-shift system in particular works, some under Section 5 postponing the operation of the Act in the iron and steel, glass and paper making industries, until 1st July of this year. The latter Orders took effect from 1st January, 1921, the date on which the Act came into operation generally. None of these Orders have had the effect of throwing anyone out of employment.

Colonel WILLIAMS: Will the right hon. Gentleman inquire as to whether the operation of this, Act on the 1st July will not throw some of these young
people out of employment, and, if so, will he take means of providing for them in the present industrial depression?

Mr. SHORTT: My present information is that it is not throwing them out of employment.

Oral Answers to Questions — CRIMINAL LUNACY.

Sir THOMAS BRAMSDON: 33.
asked the Home Secretary whether there have been cases in the past similar to that of Ronald True in which persons have been found to be of sound mind at the time the murder was committed and after conviction and before execution became insane and were reprieved; and have any such persons recovered their sanity and been executed, or is it to be understood that when a reprieve has once been granted, execution cannot follow, even within a reasonable time upon the convict recovering his sanity?

Mr. SHORTT: Since the Court of Criminal Appeal was established in 1908, the sentence of death has been respited, and the prisoner removed to Broadmoor after Statutory Inquiry, in 11 cases. I know of only one similar case—that of Townley in 1864—where the prisoner was afterwards certified sane, and in that case the sentence of death, which had been re-spited, was commuted to one of penal servitude for life, and he was removed from an asylum to prison. In no recent case has the prisoner afterwards been certified sane under Section 3 of the Criminal Lunatics Act, 1884. I think it may remove some misapprehension that appears to exist, if I state that in eight of the eleven cases that have occurred since 1908, either the Judge or the Court of Criminal Appeal, or both, while satisfied that the verdict of the jury was correct, and that the prisoner had properly been found guilty of murder and not insane in the legal sense when he committed the crime, nevertheless suggested that it was desirable that further inquiry under the powers vested in the Home Secretary should be made as to the mental condition of the prisoner before the sentence of death was carried out.

Sir T. BRAMSDON: Am I to understand that it is possible for a man to be executed if he recovers his sanity under such circumstances?

Mr. SHORTT: There is nothing in the law to prevent it, but, of course, whether it would be done is another matter.

Sir T. BRAMSDON: How often has a special inquiry been made?

Mr. SHORTT: I have answered that. There have been 11 cases since 1908, when the Court of Criminal Appeal was set up. In no case since then has a man recovered his sanity. In 1864 such a case occurred, and when he recovered his sanity, he went back to serve his term of penal servitude for life.

Sir T. BRAMSDON: I appreciate that, but how often is a medical inquiry made to ascertain whether a man has recovered?

Mr. SPEAKER: Perhaps the hon. Member will put that question on the Paper.

Oral Answers to Questions — JURORS (SESSIONS AND HIGH COURT).

Mr. GILBERT: 35.
asked the Home Secretary on what instructions jurors are summoned for Sessions and High Court juries; whether he is aware that there are many complaints about the excessive number of persons who are now summoned to the various Courts, many of whom are never called for service, and are kept waiting idle about the various Courts; and whether, in view of the expense and waste of time to many business people, he can issue any orders to those responsible for summoning jurors that only a necessary and reasonable number of persons should be summoned for each Session or Court?

Mr. SHORTT: Jurors are summoned by the Sheriffs in compliance with precepts issued by Clerks of Assize or Clerks of the Peace or a notice from the Crown Office. As it is very necessary that there should be a sufficient number in attendance to try the cases that have to be tried, it is inevitable that more jurors should sometimes be summoned than are actually required. I have no authority to issue instructions on the subject.

Oral Answers to Questions — LOCAL ELECTIONS.

Mr. SIMM: 36.
asked the Home Secretary if he will take steps to amend the Law relating to local elections, so as to
prevent vindictive prosecutions for technical breaches of the law, in view of the reference by Mr. Justice McCardie in the case of Nichol v. Fearby and Nichol v. Robinson to the town clerk of Morpeth, to the effect that the town clerk was responsible for action being taken for the purposes of revenge, and in order to effect, if possible, the financial ruin of two reputable and worthy citizens of small means; and if he is aware that the action was due to the town clerk having secured, as stated by Mr. Justice McCardie, a person to claim as common informer £1,400 from two councillors who had failed to send in the proper legal return of their election expenses?

Mr. SHORTT: I understand that further proceedings in this case are probable, and while it is still sub judice, I can express no opinion with regard to it.

Mr. CAIRNS: May I ask the Home Secretary what evidence, if any, Mr. Justice McCardic had for saying that the town clerk of Morpeth was vindictive in the case referred to in the question; and, further, can the Home Secretary institute a full and free inquiry into the whole case at Morpeth?

Mr. SHORTT: I am afraid that I cannot answer that without notice.

Oral Answers to Questions — EDINBURGH PRISON (FLOUR TENDERS).

Mr. HANNON: 37.
asked the Secretary for Scotland whether his attention has been called to the recent tender forms for flour issued by the governor of His Majesty's Prison at Edinburgh, in which it is expressly stipulated that the tenders must be for Canadian or American flour; whether he is familiar with the position of the British flour milling industry during many months past, namely, that the industry has only been working at two-thirds of its capacity, with the result that numbers of workers in the flour milling industry are unemployed; whether he is aware that such unemployment is mainly due to the dumping of foreign flour at prices which are below those at which flour is sold in the country of origin; and whether he will issue instructions that in tenders for public contracts for supplies of flour British millers will have adequate
opportunity of tendering without specific exclusion by the terms of the tender?

The LORD ADVOCATE (Mr. C. D. Murray): The answer to the first part of the question is in the affirmative. No contract for imported flour was placed as a result of the issue of these forms. The contract for the flour required at Edinburgh Prison was given to a firm of British millers. The practice of the Prison Commission for Scotland is to give to British firms an opportunity of tendering in all cases, and this practice will continue in future.

Mr. HANNON: Why were the words "Canadian or American" specifically set down in this form of tender?

Mr. MURRAY: In order to get the quotation for the price. It was subsequently discovered that the difference in price might be outweighed by the difference in quality, and accordingly an unrestricted tender was issued.

Oral Answers to Questions — POST OFFICE.

SUNDAY COLLECTION, MERIONETHSHIRE.

Mr. HAYDN JONES: 40.
asked the Postmaster-General when he proposes to arrange for a Sunday collection of letters at Dolgelley and other towns in the County of Merioneth?

The ASSISTANT POSTMASTER-GENERAL (Mr. Pike Pease): This matter will he pursued, in the event of the provision of a suitable train service. I should not feel justified in asking the railway company to open the line specially on Sundays in order to afford a despatch of letters.

SUB-POSTMASTERS (SALARIES).

Mr. AMMON: 41.
asked the Postmaster-General when he will be able to announce his decision on the salary claim of the salaried sub-postmasters?

Mr. PEASE: This claim was settled some months ago, and the decision duly promulgated.

EMPIRE WIRELESS CHAIN.

Mr. HURD: 42.
asked the Postmaster-General what is the nature of the contract made between the Australian Government and the Marconi Australian Wireless Com-
pany; has the British Post Office any share in the arrangement; and what means are now proposed to bring Australia into the British Government's Empire wireless chain?

Mr. PEASE: The contract in question is too long to summarise in an answer to the hon. Member's question, but I shall be happy to show him a copy of it for his private information if he so desires. The British Post, Office has no share in the arrangement, except to the extent that the contract contemplates communication with a station in this country, and that for the erection of such a station the cooperation of the British Post Office, in some form or other, is necessary. The bearing of the contract upon the Empire Wireless Scheme is under the consideration of the Government.

Mr. HURD: Is it a fact that Australia is definitely out of the Empire Wireless Scheme?

Mr. PEASE: No, it is not a fact.

Mr. HURD: 43.
asked the Postmaster-General whether the conference with the Canadian Government regarding the Empire wireless chain, which was announced as about to take place more than a year ago, has yet been held; and what is Canada's present relationship towards the Empire wireless project of the British Post Office?

Mr. PEASE: Informal conversations only have so far taken place. The Canadian Government will shortly send two technical representatives to discuss the whole subject with representatives of His Majesty's Government, and, after these discussions have taken place, it will be possible to describe the relationship of Canada towards the Empire Wireless Scheme.

CIRCULARS POSTED ABROAD.

Mr. PENNEFATHER: 44.
asked the Postmaster-General whether the Post Office has recently delivered a large number of circulars nominally issued from the office of the Alpine Sports, Limited, 5, Endsleigh Gardens, London, but actually posted on the Continent; and, if so, seeing that the effect of this procedure is to divert the entire proceeds of the sale of the stamps into a foreign Treasury, and to throw the whole cost of the handling
and delivery in this country upon British taxpayers, whether he has any means of preventing or discouraging such methods of securing private gain at public expense?

Mr. PEASE: A large number of circulars issued by Alpine Sports, Limited, and by the Free Church Touring Guild, have recently been received in the mails from Austria. The excuse for this practice has hitherto been the increase in the printed papers rate. As the postage on inland printed papers has now been reduced to the pre-War rate of ½d., I hope the firms concerned will discontinue the practice they have thought fit to adopt; should this continue, it may be necessary to ask Parliament to grant additional powers in order that this practice may cease.

Mr. PENNEFATHER: May I ask whether we are to understand that the excuse the right hon. Gentleman has mentioned is accepted by the Post Office as adequate and satisfactory?

Mr. PEASE: No, certainly not.

TOWN SUB-OFFICES.

Mr. AMMON: 63.
asked the Postmaster-General whether he will state the names of the town sub-offices which come within the provisions of paragraph 936 of the Report of the Select Committee on Post Office Servants, 1913, which was presided over by Mr. R. D. Holt whether he will state which of these offices have been converted, and why the remaining sub-offices have not been dealt with in accordance with the recommendation which was accepted by the then Postmaster-General; whether the withdrawal of telegraph delivery from some of the more important of these sub-offices will, by reducing the emoluments, have the effect of placing such offices outside the application of the recommendations; and whether he will state when, and in what order, he will be willing to convert these offices into Crown offices with an established staff?

Mr. PEASE: I have no list of the offices referred to, nor of those in which the Select Committee's recommendation was carried out. The policy of conversion was suspended owing to the War. I am not prepared at present to resume it except in cases where special reasons for
conversion exist. The withdrawal of telegraph delivery will in some cases have the effect stated.

PARCEL POST.

Mr. GILBERT: 64 and 65.
asked the Postmaster-General (1) if he will state, approximately, what volume of the parcel post is now carried by the railways and also what proportion of the postage is paid to the railway companies for their services; whether, in view of the urgency of a cheaper parcel post service, any revision of the charges paid to the railway companies is possible; if so, does he propose to obtain such revision at an early date;
(2) whether any of the motor-van services, which the Post Office established before the War, between London and adjacent towns of 50 to 100 miles distance have been re-established or if it is the intention to do so; whether these motor-van services helped considerably in providing a cheaper parcel post service before the War; and will he consider this or any other means of giving a cheaper parcel post service at the present time?

Mr. PEASE: Rather more than 90 per cent. of the parcel post is carried over the whole or part of its journey by rail. As the result of negotiations, which have recently been concluded with the railway companies, the companies have agreed to accept 40 per cent. of the postage on railway-borne parcels, as compared with 55 per cent. which was payable to them under the Parcel Post Act of 1882, and a Bill to confirm this agreement will. shortly be introduced. In consideration of this reduction in the proportion of the postage payable to the companies, the Post Office agrees not to re-establish the parcel coaches or otherwise to transfer parcel mails to road transport.
The parcel post is at present carried on on an unremunerative basis, and I regret that it is not. possible to offer any reduction in the postage rates.

Mr. GILBERT: Can the right hon. Gentleman say what percentage of the loss on the parcel post was incurred in connection with the motor service?

Mr. PEASE: I shall be glad to get my hon. Friend that information, but I am afraid I cannot give it at the moment.

Oral Answers to Questions — RINGS AND TRUSTS.

Commander BELLAIRS: 45.
asked the Prime Minister whether he can ascertain and inform the House when the Committee investigating rings and trusts is likely to submit its Report?

The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Sir W. Mitchell-Thomson): I have been asked to reply. My hon. and gallant Friend appears to be under some misapprehension. There is no Committee, appointed by the Government, which is engaged on an inquiry of the kind mentioned.

Commander BELLAIRS: We have had questions about this before, and it has been specifically stated that there is a Committee inquiring into rings and trusts.

Sir W. MITCHELL-THOMSON: I think the hon. and gallant Member is referring to the Profiteering Acts, which are not now in operation.

Oral Answers to Questions — UNEMPLOYMENT (BUILDING TRADE).

Mr. T. THOMSON: 46.
asked the Prime Minister whether the Government will reconsider their present policy of paying unemployed building operatives £65,000 per week for doing nothing instead of allowing them to build houses?

Mr. PARKER (for Sir Alfred Mond): My right hon. Friend has already on more than one occasion indicated the grounds of the policy adopted by the Government, and the hon. Member may take it that all relevant considerations were taken into account in reaching a decision, including the consideration that the whole burden involved in Government housing undertaken at present normally falls on the taxpayer and lasts for a long period, which it is to be hoped will not be the case as regards unemployment benefit in the building trade. He is glad to note that unemployment in that trade is in fact steadily decreasing.

Mr. THOMSON: Would the hon. Gentleman make representations to the Prime Minister that since the last statement made on behalf of the Government
the bank rate has fallen, and would therefore reduce considerably any slight loss there might be in the building of houses?

Mr. PARKER: I will convey that statement to the Minister of Health.

Oral Answers to Questions — AIR POWER.

Major-General SEELY: 47.
asked the Prime Minister whether his attention has been called to the fact that the reserve for the Royal Air Force to be provided by civil aviation has almost entirely disappeared, and that as a consequence our defensive power in the air has fallen to a dangerously low level in comparison with other countries and in relation to the other arms of our own service; and what action he proposes to take in the matter?

The SECRETARY of STATE for AIR (Captain Guest): rose—

Major-General SEELY: On a point of Order. I put down this question to the Prime Minister, and expected an answer from the Lord Privy Seal. How can the Secretary of State for Air reply to a question referring to other forces, especially as he is not in the Cabinet, and the other two right hon. Gentlemen are? The whole point of the question was in putting it to the Prime Minister or to the Lord Privy Seal.

Mr. CHAMBERLAIN: I am sorry if my right hon. and gallant Friend thinks there was any discourtesy—

Major-General SEELY: Oh, no!

Mr. CHAMBERLAIN: —in asking my right hon. and gallant Friend (Captain Guest) to reply to the question. He was good enough to show me the terms of his answer, in which I concur. I asked him to answer, because thought there might be supplementary questions that he would be more competent to answer than I myself. But will read the answer.
My right hon. and gallant Friend may be assured that His Majesty's Government are alive to the bearing upon national security of the developments of aviation in all their various aspects, and are giving the present position their very
careful consideration. It must not, however, be taken to indicate that our defensive power is necessarily dependent to more than a limited degree upon the condition of civil aviation.

Major-General SEELY: What action is the Government really taking now, apart from consideration, in view of the deplorable situation in which we stand in the air relatively to other Powers?

Mr. CHAMBERLAIN: It is generally held, I think, that consideration should precede action.

Major-General SEELY: But consideration has proceeded for two years, and this is the result I ask what action is now being taken after two years' consideration?

Mr. CHAMBERLAIN: I can give no further answer. I do not profess to be conversant with the details, but what I do know is that the position as a whole, and the serious questions involved, are under consideration at this time. Beyond that I cannot go. If my right hon. and gallant Friend desires further information, apart from broad policy, I shall be obliged if he will put a question down.

Major-General SEELY: I will do so for Thursday to the Prime Minister.

Major-General SEELY: 71.
asked the Secretary of State for Air if he can state the approximate number of civil aircraft of value for war purposes now available in the principal European countries and in the United States of America?

Captain GUEST: The numbers of civil aircraft borne on the French, Belgian, and Dutch registers on 1st May were 598, 39, and 15 respectively. In the absence of any authoritative statement by the Governments concerned, it is impossible to say what proportion of these aeroplanes would be of value for fighting or war-training purposes, but it is probable that the number fit for modern warfare would be small. As regards Germany, 225 aeroplanes were, on 1st May, available for air traffic, but none of these would be of value for war purposes. As regards America, the estimated number of civil aircraft in operation in 1921 was 1,200. Of these, approximately 600 were employed by civil air transport companies.

Oral Answers to Questions — TURKEY AND GREECE.

Lieut.-Commander KENWORTHY: 48.
asked the Prime Minister what is the attitude of His Majesty's Government towards the action of the Greek Government in sending warships into the Black Sea to bombard the Turkish coast towns; and whether any communications have been sent by or to the Greek Government on this subject?

The UNDER-SECRETARY of STATE for FOREIGN AFFAIRS (Mr. Cecil Harmsworth): His Majesty's Government, while considering that the bombardment of Samsun may be technically justifiable, deeply regret the incident as likely to impair the chances of peace, and are taking steps to ensure that the Greek Government are informed of their view, in the hope that such bombardments may not be repeated.

Lieut.-Commander KENWORTHY: While thanking the hon. Gentleman for that very satisfactory answer, may I ask if it would not be possible to exercise some control over these Greek warships going through the Straits and into the Bosphorus?

Mr. HARMSWORTH: I should prefer not to add anything to the answer I have given to the hon. and gallant Gentleman.

Oral Answers to Questions — HOUSE OF LORDS.

Mr. G. LOCKER-LAMPSON: 49.
asked the Lord Privy Seal whether he can now say when the Resolutions for the alteration of the relations between the two Houses of Parliament will be introduced?

Mr. CHAMBERLAIN: I hope that they may be introduced in the week beginning the 16th July, when it is expected that my Noble Friend the Secretary of State for Foreign Affairs will himself be able to attend and move them.

Mr. LOCKER-LAMPSON: Will not the Resolution affecting the relations between the two Houses be introduced in this House?

Mr. CHAMBERLAIN: No, Sir; that question has been answered several times already. The Resolution in relation to the reform of the other House deals also with the relations between the two Houses, and it will be introduced in another place.

Oral Answers to Questions — HONOURS LIST.

Mr. G. LOCKER-LAMPSON: 50.
asked the Lord Privy Seal whether he will inform the House what procedure is followed by the different Departments in submitting names of persons for the Honours List?

Mr. CHAMBERLAIN: Some weeks before the date of each Honours List, Departments are asked by the Prime Minister's directions to send to the Prime Minister the names of any persons whom they desire to recommend for an honour. The names eventually approved are submitted by the Prime Minister to the King.

Mr. LOCKER-LAMPSON: Does any Department act as a clearing house for the other Departments, and are the different recommendations of the Departments sent to one Department of the State and there again gone over, and a final list made out for the Prime Minister?

Mr. CHAMBERLAIN: The recommendations of the Departments are sent direct to the Prime Minister, and the special adviser, by virtue of his office to the Prime Minister, in relation to honours given to departmental servants, is the permanent head of the Treasury.

Lord H. CAVENDISH-BENTINCK: What method is adopted by the Prime Minister to select the names for honours? [HON. MEMBERS: "Answer!"]

Mr. DEVLIN: How much do you give for a baronetcy, and what is the price of a knighthood? [An HON. MEMBER: "The present market value!"]

Oral Answers to Questions — COINAGE.

Lieut.-Colonel SIR P. RICHARDSON: 51.
asked the Chancellor of the Exchequer whether, in the interests of economy and convenience, he will consider the desirability of reducing the size of British coins so that the halfpenny should be of the same size as the United States of America cent, or, alternatively, of introducing nickel coins as in several Colonies and foreign countries, such as India, Ceylon, France, Belgium and the United States of America?

Sir JOHN BAIRD (for Mr. Hilton Young): My right hon. Friend the Chancellor of the Exchequer is not aware of
any demand for a reduction in the size of British bronze coinage or a change in the alloy used. The resulting economy, if any, would be negligible.

Oral Answers to Questions — TRANSPORT.

SOUTH EASTERN AND CHATHAM RAILWAY (ELECTRIFICATION).

Mr. HANNON: 52.
asked the Chancellor of the Exchequer whether the Trade Facilities Committee have undertaken to guarantee capital expenditure and interest of six and a half millions by the South Eastern Railway Company, such expenditure including an amount of about one and a half millions for the erection of a power station for the sole use of the South Eastern Railway Company; and, seeing that such outlay upon a power station by the South Eastern Railway Company would defeat the objects of the Electricity Supply Act, 1919, and of the Electricity Supply Bill now before the House, that the. South Eastern Railway Company has undertaken to keep the capital cost of its power station apart from other capital expenditure under its scheme, and also keep separate accounts of costs of generation, so that the travelling public may not suffer from undue capital expenditure and abnormally high costs of generation, and that in the public interest one super-station, as contemplated in the 1919 Act, would more adequately meet the transport and power and lighting needs of the areas affected, whether he will inquire further into this matter?

Sir J. BAIRD: The Treasury have expressed their willingness on the recommendation of the Advisory Committee under the Trade Facilities Act, to guarantee the principal and interest of a loan of £6,500,000 to be raised for the purpose of electrifying the suburban service of the South Eastern and Chatham Railway Company, and for the erection of a power station. As regards the erection of the power station, the recommendation of the Advisory Committee has been given subject to the approval of the Electricity Commissioners, who are at the present time holding an inquiry into the applications
which have been made by the South Eastern and Chatham Railway Company and other parties for permission to erect a station in the area concerned.

Mr. WISE: 58.
asked the Chancellor of the Exchequer what is the security the Government will hold against the advance to the South Eastern Railway Company under the Trade Facilities Act?

Sir J. BAIRD: The hon. Member is under a misapprehension. No advances are made by His Majesty's Government under the Trade Facilities Act which is limited to guarantees of loans raised by the parties concerned. The South Eastern and Chatham Company have undertaken to make annual payments sufficient to cover the service of the guaranteed loan.

RAILWAY CARRIAGE DOORS (SECURITY).

Sir CHARLES SYKES: 84.
asked the President of the Board of Trade, whether he is prepared to appoint a Select or Departmental Committee to inquire into the question of the provision of better security of the doors of carriages on passenger trains and whether he is aware that inventions have been produced which automatically keep the doors of the carriages locked until the train becomes stationary?

The PARLIAMENTARY SECRETARY to the MINISTRY of TRANSPORT (Mr. Neal): I have been asked to reply to this question. A number of devices for locking railway carriage doors automatically until a train becomes stationary have been brought to the notice of the Ministry of Transport and examined by the Inspecting officers of railways. I am advised that such devices would be liable to interfere with the egress of passengers in the event of accident or emergency and are also open to other practical objections. In the circumstances, I do not think that an inquiry such as my hon. Friend suggests is called for.

Oral Answers to Questions — INCOME TAX (MR. E. JENNINGS).

Mr. SEXTON: 53.
asked the Chancellor of the Exchequer if his attention has been called to the case of Mr. E. Jennings, of 68, Rosslyn Street, St. Michaels, Liverpool, who has been refused a rebatement of Income Tax in the case of his daughter acting as his housekeeper; and, if not, will he make inquiries into this matter?

Sir J. BAIRD: I am making inquiry into this case, and will communicate the result to the hon. Member.

Oral Answers to Questions — SAFEGUARDING OF INDUSTRIES ACT.

FRENCH AND AMERICAN GOONS.

Mr. KILEY: 54.
asked the Chancellor of the Exchequer what were the principal commodities imported from France upon which £28,830 was collected under the Safeguarding of Industries Act during the period October to March; and can he give similar information concerning commodities imported from the United States on which £38,000 was collected for the same period?

Sir J. BAIRD: The figures referred to relate to the period from October to May inclusive, and not from October to March, as stated in the question. In the case of the amount of £28,830 collected in respect of goods consigned from France, the principal articles were optical glass and elements, optical instruments and fine chemicals. Of the amount of £38,177 collected in respect of goods consigned from the United States of America, the principal articles were fine chemicals, scientific instruments, optical glass and elements, optical instruments, wireless valves and similar rectifiers, and vacuum tubes.

Captain WEDGWOOD BENN: Is the hon. Gentleman aware that at Paris resolutions were come to pledging the Allies to economic solidarity after the War?

MUSICAL TOYS.

Lieut.-Commander KENWORTHY: 56.
asked the Chancellor of the Exchequer how many pianos imported during the year 1921, upon which a duty of 33⅓ per cent. was levied, consisted of toy pianos of the value of 1s. and upwards; and what proportion of the duty collected on musical instruments was on musical toys, such as trumpets, squeakers, bagpipes, and hurdy-gurdies?

Sir J. BAIRD: I regret that the information required is not available.

NAPIITIIALENE.

Mr. KILEY: 59.
asked the Chancellor of the Exchequer whether his attention has
been called to the position which is being created by the fact that importers of naphthalene in flakes are now to have their importations admitted free of duty, while importers of naphthalene in the shape of round balls will have to pay duty; and does he see his way clear to propose arrangements to amend the Safeguarding of Industries Act, so as either to exclude naphthalene altogether or include it in whatever form it arrives?

Sir W. MITCHELL-THOMSON: I have been asked to reply. The hon. Member is in error. I am sending him a copy of a. notice which appeared in the Board of Trade Journal on 6th April last, from which he will see that naphthalene in all forms may now be imported free of duty.

Mr. KILEY: Did the hon. Member hear the reply given by the Department the other day, which stated that if naphthalene was imported in flakes it would be admitted free of duty, but if it was imported in the shape of round balls it would have to pay duty?

Sir W. MITCHELL-THOMSON: I heard the question put and the answer given to it the other day, but I am afraid the hon. Member did not fully appreciate the effect of the answer.

GAS MANTLES.

Mr. FOOT: 62.
asked the Chancellor of the Exchequer if he is aware of the chaos now existing in the gas mantle industry by the uncertainty prevailing as to what tax is payable; seeing that the taxable material is assumed to be about 5 per cent. of the value of the mantle, can he say why he is demanding that 25 per cent. shall be deposited; and, if he is not yet in a position to announce what the duty is to be, will he reduce this percentage of 25 per cent. immediately?

Sir J. BAIRD: The hon. Member is, I think, under a misapprehension. As stated by my right hon. Friend the Chancellor of the Exchequer in his reply to the hon. Member for Whitechapel on the 15th instant, the 25 per cent. refers not to the duty, but to the value on which the duty is calculated. The deposit of duty is therefore at the rate of only 8⅓ per cent. of the value of the mantle, and my right hon. Friend does not see his way to reduce this amount further pending the determination of the
exact rates appropriate to the various types of mantle, which is expected within the next few days.

Lieut.-Colonel Sir J. NORTON-GRIFFITHS: Will the, hon. and gallant Member consider the advisability, in view of the prevalence of unemployment in the gas mantle trade, of taking steps to increase the duty on gas mantles?

Mr. SPEAKER: That question does not arise.

SMALL CONSIGNMENTS.

Lieut.-Commander KENWORTHY: 86.
asked the President of the Board of Trade whether it is possible for him, in conjunction with the Board of Customs, to take some action to exempt small consignments from duties under the Safeguarding of Industries Act when the amount of duty does not reach, say 10s., seeing that in a recent case, in order to obtain the sum of 11d., being the amount of duty payable on certain articles of glassware, the Post Office charged 15s. for opening the parcels, and in consignments which do not arrive by post the charge for opening one packing: case is 3s. 6d., the cost for rent, breaking-in, and breaking-out often amounts to as much as 20s. in addition to other charges?

Sir W. MITCHELL-THOMSON: It would not be possible to take any action of the kind suggested by the hon. and gallant Member without legislation, which at present is not contemplated.

Lieut.-Commander KENWORTHY: Is the matter being considered in view of the actual inconvenience which has arisen?

Sir W. MITCHELL-THOMSON: No legislation is contemplated at the present moment.

Oral Answers to Questions — BEER DUTY.

Mr. PENNEFATHER: 55.
asked the Chancellor of the Exchequer by how much per cent. the British Beer Duty has increased since 1913, and by how much per cent. the Beer Duty has been increased or reduced in Germany during the same period?

Sir J. BAIRD: The duty on British beer has been increased by 1,190 per cent. since 1913. As regards the German tax,
the basis of charge was altered in 1918 and has since been levied on the beer itself instead of on malt. This makes it impossible to state with precision the percentage increase in the duty since 1913. In any ease, in view of the variations in the exchange value and the purchasing power of the mark a calculation of the percentage increase would be meaningless.

Mr. PENNEFATHER: Is it not the case that, while the tax on beer in this country has increased over a thousand per cent., that the tax on beer in Germany has actually been reduced?

Mr. SPEAKER: The hon. Gentleman had better put that question down.

Oral Answers to Questions — INTERNATIONAL TRADE CORPORATION.

Mr. WISE: 57.
asked the Chancellor of the Exchequer if the International Trade Corporation has been registered; and, if so, who are the directors?

Sir J. BAIRD: The answer to the first part of the question is in the negative. The second part does not therefore arise.

Oral Answers to Questions — SPIRITS DUTY (PERFUMES).

Major KELLEY: 60.
asked the Chancellor of the Exchequer whether he is aware that a firm of perfumery manufacturers, which for many years used an average of 6,000 gallons of alcohol yearly, only purchased 100 gallons in four months this year owing to the rise in the cost of spirit used in perfumery from 20s. per gallon in 1914 to £6 per gallon now; that this firm has been forced to dismiss 60 skilled employés; and whether he can find means of relieving the burden of taxation that is crushing the perfumery trade?

Sir J. BAIRD: My right hon. Friend the Chancellor of the Exchequer is not aware of the particular case referred to by my hon. Friend, but he would ask him to await the Debate on the Committee Stage of the Finance Bill, when a new Clause is being moved dealing with the question referred to.

Captain GEE: Will my hon. and gallant Friend consider the advisability of doubling the tax on perfumes, which are luxuries, and reducing the tax on beer, which is a necessity?

Oral Answers to Questions — INCOME TAX (REGULAR OFFICERS).

Sir P. RICHARDSON: 66.
asked the Minister of Pensions whether the pensions of Regular officers who retired on account of medical unfitness during the War are exempt from Income Tax; and, if so, whether the pensions of Regular officers who retired before the War, but who served and became medically unfit during the War, and are now in receipt of disability pensions, will also he exempted from Income Tax?

Sir J. BAIRD: I have been asked by my right hon. Friend to answer this question. Under the provisions of Section 16 of the Finance Act, 1919, the retired pay of disabled officers granted on account of medical unfitness attributable to or aggravated by naval, military, or Air Force service, is exempt from Income Tax. In the case of a Regular officer who retired upon an ordinary pension before the War, but who served and became medically unfit during the War, the exemption extends to the additional pension granted to the officer by reason of his service during the War, but not to the pension awarded to him on his original retirement.

Oral Answers to Questions — NAVAL AND MILITARY PENSIONS AND GRANTS.

PRE-WAR PENSIONERS.

Mr. BANTON: 67.
asked the Minister of Pensions when the Regulations as to increase of pensions in the case of former war pensioners who were again invalided in the Great War will be issued?

The PARLIAMENTARY SECRETARY to the MINISTRY of PENSIONS (Major Tryon): Provision has already been made by the Royal Warrant of 1st November, 1920, for increasing pensions awarded in respect of disabilities due to service in former wars.

ASTHMA AND BRONCHITIS CASES (TREATMENT).

Mr. SEXTON: 68.
asked the Minister of Pensions if he has had any complaints from the inmates of Pensions hospitals suffering from chronic asthma and bronchitis who are pronounced incurable and whose application to be released from hospital and treated at their homes has
been refused; and if he can state the cost of the keep of such persons per head while inmates as compared with private treatment at their own homes?

Major TRYON: My right hon. Friend has no knowledge of any complaints of this nature and will be glad to have particulars of any case which my hon. Friend may have in mind.

Mr. SEXTON: I gave all the particulars with the question.

DISABLEMENT (ASSESSMENT).

Major KELLEY: 69.
asked the Minister of Pensions if he is prepared to consider the cases of ex-service men who have been deprived of their pension or had the same reduced and are still incapacitated; and, seeing that these cases ought to be the subject of a special inquiry as to their pre-War health, can he arrange for their consideration by specialists skilled in the ailments from which men allege themselves to be suffering?

Major TRYON: Every man dissatisfied with the assessment of his disablement has a right of appeal either to a Medical Appeal Board or to an Assessment Appeal Tribunal; and every man who is refused pension on the ground that his disability is not due to service has a right of appeal to an Entitlement Appeal Tribunal. In the case of a Medical Appeal Board a specialist sits on the Board; and, in the other cases, the Tribunal is empowered to consult a specialist when they consider that course necessary. The man's complete medical history, so far as obtainable, is always placed before the Board or Tribunal.

Captain GEE: Will the hon. and gallant Gentleman consider the advisability of publishing broadcast to ex-service men what the Appeal Tribunal really is for, as so many do not understand it?

Major TRYON: I believe it is most important that ex-service men should know their rights and privileges, and we do our best to keep them well informed.

Oral Answers to Questions — CANADIAN CATTLE EMBARGO.

Commander BELLAIRS: 70.
asked the Minister of Agriculture whether he is aware of the estimate of an importation of 200,000 head of cattle from Canada
alone in the event of the present precautions in regard to the importation of live cattle being swept away; and whether his Department has formed any estimate as to the cost to the taxpayers of this country if we are thereby forced to adopt similar quarantine arrangements to those found necessary in Canada and as to the practicability and efficiency of applying these quarantine arrangements at the great ports likely to be the centres of the cattle trade, having regard to the congestion already experienced?

The MINISTER of AGRICULTURE (Sir Arthur Boscawen): The answer to the first part of the hon. and gallant Member's question is in the affirmative. No Estimate has been prepared by my Department as to the probable cost if similar quarantine arrangements to those in force in Canada were established in this country. It. is probable that large additional accommodation at the ports would be necessary, but if so, the cost would not fall upon the taxpayer but on the trade.

Lieut.-Colonel WHELER: May I take it that such arrangements will have to be made, and will those charges fall upon the exporter rather than upon the people of this country?

Mr. SPEAKER: That seems to be rather a hypothetical question.

Oral Answers to Questions — COAL MINES (ACCIDENTS).

Mr. ROBERTSON: 88.
asked the Secretary for Mines whether the figures relating to fatal and non-fatal accidents in coal mines for the period January, February, and March, 1922, compared with the figures for the same period for the year 1913, show an increase in the accident rate when the number of accidents is considered in relation to the number of persons employed in the mines and the number of shifts worked; and whether it would be possible in the future for the Mines Department to publish figures of accidents in mines in relation to the number of man-shifts worked?

The SECRETARY for MINES (Mr. Bridgeman): I am taking steps to publish accident returns in future on the
basis of man-shifts worked, but this information is not available for past periods. On a rough estimate from such data as are in my possession, it would appear that the accident rate per man-shift is rather lower this year than it was in 1913. The actual numbers of reported accidents (excluding minor injuries) are 297 fatal and 1,446 non-fatal in the first three months of 1913 and 249 fatal and 1,147 non-fatal in the first three months of this year. These figures cover all mines.

Mr. ROBERTSON: Is the right hon. Gentleman aware that so far as Scotland is concerned there is an increase in the number of compensation claims to the extent of about 40 per cent., and although a reduction has taken place the number of claims is increasing.

Mr. BRIDGEMAN: I shall be very glad if the hon. Gentleman will give me any information he may have on the subject. The compensation may be claimed for damage.

Mr. LAWSON: Is the right hon. Gentleman aware that in the last 11 years there has been no review of the safety arrangements for dealing with accidents, notwithstanding the fact there have been very great changes in the methods of working the mines?

Mr. BRIDGEMAN: That is not the case. The whole question of safety appliances is under the constant observation of the Mines Department and of a special Committee which is even now sitting on the subject.

Oral Answers to Questions — WAGES (PRINCIPAL INDUSTRIES).

Sir W. de FRECE: 72.
asked the Minister of Labour whether, taking the 12 chief industries of the country, including transport, he will state the average weekly wage-rate in each case now as compared with June, 1921, June, 1920, June, 1919, and June, 1914, respectively?

The PARLIAMENTARY SECRETARY to the MINISTRY of LABOUR (Sir Montague Barlow): I regret that the information in my possession is insufficient to enable me to give particulars as to the average weekly wage-rate in the 12 principal industries. Some alterna-
tive particulars are available, however, as to the comparative level of wages in a number of the principal industries at the dates referred to, and as these involve a tabular statement, I propose, with my hon. Friend's permission, to circulate them in the OFFICIAL REPORT.

I.—RATES OF WAGES OF TYPICAL CLASSES OF TIME WORKERS IN CERTAIN INDUSTRIES.


Industry.
Rates of Wages at—


July, 1914.
July, 1919.
June, 1920.
June, 1921.
June, 1922.



Per week.
Per week.
Per week.
Per week.
Per week.


Building (a) (40 large towns):







Bricklayers
40s. 7d.
75s. 6d.
97s. 8d.
93s. 8d.
71s. 10d.


Painters
36s. 3d.
72s. 8d.
95s. 2d.
93s. 8d.
71s. 9d.


Labourers
26s. 11d.
61s. 4d.
84s. 8d.
80s. 7d.
54s. 1d.


Engineering (a) (16 of the principal districts):







Fitters and Turners
38s. 11d.
77s. 0d.
89s. 5d.
89s. 3d.
72s. 9d.


Labourers
22s. 10d.
58s. 3d.
70s. 8d.
70s. 6d.
55s. 8d.


Shipbuilding (a) (13 of the principal districts):







Shipwrights (e)
41s. 4d.
78s. 10d.
91s. 3d.
84s. 10d.
58s. 7d.


Ship Joiners (e)
40s. 0d.
77s. 10d.
102s. 4d.
94s. 7d.
60s. 5d.


Labourers (e)
22s. 10d.
58s. 0d.
70s. 6d.
64s. 0d.
40s. 1d.


Railway Service:







Engine Drivers (c)
45s. to 50s.(b)
78s. to 83s.
84s. to 102s.
85s. to 103s.
72s. to 90s.


Ticket Collectors
23s. to 27s.(b)
56s. to 60s.
66s. 6d. to 74s.
67s. 6d. to 75s.
54s.6d. to 62s


Goods Porters
19s. to 23s.(b)
52s. to 56s.
62s, to 68s. 6d
63s. to 69s. 6d.
50s. to 56s. 6d


Dock Labour (10 of the principal ports):







Ordinary cargo workers
4s. 6d. to 6s. 8d. per day.
5s. 10d. to 7s. per half day.
15s. to 17s. 6d. per day.
15s. to 17s. 6d. per day.
11s. to 13s. 6d per day.


Shipping (d) (Foreign-going vessels):
Per month.
Per month.
Per month.
Per month.
Per month.


Able seamen
£5 to £5 10s.
£14 10s.
£14 10s
£12
£10


Firemen
£510s, to £6
£15
£15
£12 10s.
£10 10s.


Road Transport (a):
Per week.
Per week.
Per week.
Per week.
Per week.


Tram Drivers (50 of the principal districts).
30s. 7d.
60s. 3d.
73s. 3d.
73s. 3d.
63s. 3d.


One-horse Carters (12 large towns).
25s. 7d.
56s.
65s.
66s. 1d.
57s. 2d.


Printing (a) 27 large towns:
35s. 8d.
69s. 6d.
88s. 0d.
93s. 4d.
86s. 2d.


Hand Compositors and Machine Minders on Book and Jobbing Work.







Bookbinders and Machine Rulers.
33s. 11d.
69s. 4d.
87s. 6d.
93s. 4d.
86s. 6d.


Agriculture (England and Wales):







Ordinary Labourers
14s. to 228.(b)
36s. 6d. to 42s. 6d
42s. to 146s. 6d.
46s. to 52s.
30s. to 36s.


(a) The rates quoted are the unweighted averages of the recognised rates of wages in the principal towns or districts.


(b) Approximate figures.


(c) Some of the drivers are paid mileage allowances in addition to the rates shown.


(d) Food is provided in addition to the rates quoted.


(e) The figures for the Shipbuilding industry relate to time-workers. A large proportion of the workpeople in this industry, however, are paid at piece rates, and the figures given are not applicable to piece-workers.

Mr. SWAN: Will the hon. Gentleman place opposite that statement the comparative cost of living from the year 1914 down to last year.

Sir M. BARLOW: I think that should be dealt with as a separate question.

Following is the statement promised:

Oral Answers to Questions — EDUCATION.

WOMEN INSPECTORS.

Mr. GWYNNE: 76.
asked the President of the Board of Education why the staff of women inspectors has been increased by nine since last year; and on what grounds their salaries have been increased from £25,911 to £29,965?

The PARLIAMENTARY SECRETARY to the BOARD of EDUCATION (Mr. Herbert Lewis): The increase in the number of women inspectors is due to the replacement of six vacant posts of assistant inspector (men) and three vacant posts of junior inspector (men) by nine posts of woman inspector. The increase of cost from £25,911 to £29,773 is due partly to the increase in numbers and partly, as regards women inspectors already on the establishment, to normal annual increments. There are still a large number of vacancies in the establishment of the inspectorate.

Mr. GWYNNE: Would it not have been better for the right hon. Gentleman's Department to cut down the number of
inspectors and thus reduce the cost instead of adding to the Vote?

Mr. LEWIS: On the contrary, as I have pointed out, there is a large number of the vacancies in the establishment of the Inspectorate, and the increase in the number of women inspectors is due to their replacing men.

Mr. GWYNNE: Will the right hon. Gentleman take steps to decrease the total number of the inspectors?

Mr. LEWIS: The existing inspectorate is a very hard-worked body of men and women.

Mr. GWYNNE: Is the right hon. Gentleman aware that most schools are visited each year by nine or ten inspectors and different inspectors are sent down at the same time?

TEACHERS' SUPERANNUATION.

Sir PHILIP MAGNUS: 77.
asked the President of the Board of Education if he is now able or, if not, whether he can say when he may be able to announce the names of the members of the Depart-
mental Committee to be appointed to consider and report upon the School Teachers (Superannuation) Act, 1918, in accordance with the terms of the reference that have been published?

Mr. LEWIS: My right hon. Friend the Chancellor of the Exchequer, who is appointing the Committee, hopes to make an announcement at an early date?

Sir P. MAGNUS: When is the right hon. Gentleman likely to be able to make the announcement?

Mr. LEWIS: I am afraid that I cannot say more at present.

KENT EDUCATION COMMITTEE (ACCOUNTS).

Lieut.-Colonel WHELER: 79.
asked the President of the Board of Education whether he is aware that the education committee of the Kent County Council has to engage additional clerical staff to carry out the Education Accounts (Annual Statement) Order, and that this additional staff will have to be a permanent addition to the education staff of the committee; and will he therefore indicate what economies in staff are to be effected at the Board headquarters to produce the large economy expected by him?

Mr. LEWIS: I have no information as to the first part of the question, but I would refer the hon. and gallant Member to the answers which my right hon. Friend gave him on the 3rd and 11th of May.

Lieut.-Colonel WHELER: If the right hon. Gentleman is furnished with information on the lines mentioned in my question, will he send an answer showing how savings can be effected?

Mr. LEWIS: There is no doubt that the new form of accounts will result in very considerable economies.

Oral Answers to Questions — GRETNA (SALE).

Major CHRISTOPHER LOWTHER: 80.
asked the Financial Secretary to the Treasury whether any progress has been made in the matter of the sale of Gretna?

Sir J. BAIRD: About 4,600 acres of surplus agricultural land, farm buildings and woods and 24 bungalows in the townships of Eastriggs and Gretna, have been sold to the Board of Agriculture for Scotland
for the lands settlement scheme. This property, together with certain church sites and canteens realised, approximately, £110,000. In addition, approximately, £140,000 has been realised by the sale of certain temporary hutments, furnishings and materials recovered from buildings, the destruction of which was essential owing to their being impregnated with explosives, and by the sale of factory stores and materials. No satisfactory offer has been received for the factory as a whole and, as the hon. and gallant Member for Dumfries was informed on the 23rd May, unless such an offer is forthcoming without delay the Disposal Board will take steps to realise the property piecemeal to the best advantage.

Oral Answers to Questions — ANGLO-PERSIAN OIL COMPANY (PAYMENT OF CALLS) BILL.

Reported, without Amendment, from Standing Committee B.

Report to lie upon the Table, and to be printed.

Minutes of the Proceedings of the Standing Committee to be printed.

Bill, not amended (in the Standing Committee), to be taken into consideration To-morrow.

Oral Answers to Questions — BRITISH NATIONALITY AND STATUS OF ALIENS BILL,

"to amend the British Nationality and respects the acquisition of British nation-Status of Aliens Acts, 1914 and 1918, as respects the acquisition of British nationality by persons born out of His Majesty's Dominions," presented by Mr. SHORTT; supported by Sir John Baird; to be read a Second time To-morrow, and to be printed. [Bill 153.]

STANDING COMMITTEES (CHAIRMEN'S PANEL).

Mr. JOHN WILLIAM WILSON reported from the Chairmen's Panel: That they had appointed Mr. Hodge to act as Chairman of Standing Committee A (in respect of the Separation and Maintenance Orders Bill); Mr. T. P. O'Connor
as Chairman of Standing Committee B (in respect of the Indian High Courts Bill [Lords] and the Sale of Tea Bill); Sir Halford Mackinder as Chairman of Standing Committee B (in respect of the Harbours, Docks, and Piers (Temporary Increase of Charges) Bill); Sir William Pearce as Chairman of Standing Committee B (in respect of the Summer Time Bill [Lords] and the Naval Discipline Bill [Lords]); Mr. John William Wilson as Chairman of Standing Committee C (in respect of the National Health Insurance Bill); Sir Samuel Roberts as Chairman of Standing Committee C (in respect of the Electricity Supply Bill [Lords]); Mr. William Nicholson as Chairman of Standing Committee C (in respect of the Allotments Bill [Lords] and the Wireless Telegraphy and Signalling Bill); and Sir Halford Mackinder as Chairman of the Standing Committee on Scottish Bills (in respect of the Employment of Children Act (1903) Amendment (Scotland) Bill).

Report to lie upon the Table.

SELECTION (STANDING COMMITTEES).

STANDING COMMITTEE C.

SIR SAMUEL ROBERTS reported from the Committee of Selection; That they had added the following Fifteen Members to Standing Committee C (in respect of the Allotments Bill [Lords]): Sir Ryland Adkins, Mr. Banton, Major Brassey, Mr. Evan Davies, Mr. Hugh Edwards, Captain FitzRoy, Mr. Gilbert, Sir Arthur Boscawen, Major Hills, Mr. Lane-Fox, Mr. Thomas Lewis, Mr. Royce, Mr. Charles Williams, Mrs. Wintringham, and Sir Kingsley Wood.

STANDING COMMITTEE B.

SIR SAMUEL ROBERTS further reported from the Committee; That they had added the following Fifteen Members to Standing Committee B (in respect of the Summer Time Bill [Lords]): Mr. Aclaad, Sir Frederick Banbury, Major Colfox, Mr. George Edwards, Mr. Gillis, Sir James Greig, Rear-Admiral Sir Reginald Hall, Mr. Hinds, Sir Harry Hope, Mr. C. D. Murray, Mr. Macquisten, Mr. Munro, Mr. Shoat, Mr. William Thorne, arid Mr. Murrough Wilson.

STANDING COMMITTEE C.

SIR SAMUEL ROBERTS further reported from the Committee; That they had discharged the following Members from Standing Committee C (during the consideration of the National Health Insurance Bill): Mr. Haywood and Mr. Holmes; and had appointed in substitution: Mr. Trevelyan Thomson and Major Mackenzie Wood.

SIR SAMUEL ROBERTS further reported from the Committee; That they had discharged the following Member from Standing Committee C (added in respect of the National Health Insurance Bill): Mr. Godfrey Locker-Lampson.

SCOTTISH STANDING COMMITTEE.

SIR SAMUEL ROBERTS further reported from the Committee; That they had discharged the following Member from the Standing Committee on Scottish Bills (added in respect of the Employment of Children Act (1903) Amendment (Scotland) Bill): Mr. Arthur Michael Samuel; and had appointed in substitution: Lieut.-Colonel Dalrymple White.

Reports to lie upon the Table.

UNIVERSITIES (SCOTLAND) BILL [Lords].

Read the First time; to be read a. Second time upon Monday next, and to be printed. [Bill 154.]

MERCHANDISE MARKS BILL [Lords].

Read the First time; to be read a Second time upon Monday next, and to be printed. [Bill 155.]

Orders of the Day — FINANCE BILL.

Considered in Committee.

[SECOND DAY.]

[Mr. JAMES HOPE in the Chair.]

CLAUSE 6.—(Excise duties on sugar and molasses made from home-grown materials to cease.)

(1) The duties of excise chargeable under Section nine of the Finance Act, 1918, in respect of sugar and molasses made in Great Britain or Ireland and (except as regards goods in respect of which the said duties have been paid) the excise drawbacks and allowance under the said Section shall, as respects sugar and molasses made from beet grown in Great Britain or Ireland (in this Section referred to as "non-dutiable sugar and molasses") cease and determine as from the commencement of this Act.
(2) Part III of the First Schedule to the Finance (No. 2) Act, 1915, shall have effect as though references therein to the manufacture and manufacturers of sugar included references to the manufacture and manufacturers of non-dutiable sugar, and with the substitution in the application thereof to the manufacturers of non-dutiable sugar of the words "with a view to securing that no drawback or allowance shall be, paid in respect of sugar or molasses upon which no duty has been paid" for the words "with a view to securing and collecting the excise duty imposed by this Act."
(3) Notwithstanding anything in any Act, the Commissioners of Customs and Excise may, subject to the prescribed conditions, permit a person refining sugar in bond to receive non-dutiable sugar or molasses at his bonded premises and to deliver therefrom without payment of duty a corresponding quantity of sugar or molasses.
(4) A person manufacturing non-dutiable sugar or molasses shall not, except with the permission of the Commissioners of Customs and Excise and subject to the prescribed conditions, have in his custody or possession any materials out of which sugar or molasses are manufactured other than beet grown in Great Britain or Ireland or materials produced from such beet.

If any person acts in contravention of this Sub-section he shall in respect of each offence be liable to an excise penalty of one hundred pounds, and the goods in respect of which the offence is committed shall be forfeited.

(5) In this Section the expression "prescribed" means prescribed by Regulations made by the Commissioners of Customs and Excise.

Colonel WEDGWOOD: I beg to move, in Sub-section (1), to leave out the words,
as respects sugar and molasses made from
beet grown in Great Britain or Ireland (in this Section referred to as non-dutiable sugar and molasses).
4.0 p.m.
We now come to the Clause dealing with the Sugar Duties. There are two Amendments on the Paper in the name of the party for which I speak, and we wish to see that the discussion on such Amendments that you may select does not eliminate the points which we want to raise. The effect of the first Amendment is to abolish the Excise duties on sugar, and the second Amendment is to leave out Clause 6 which raises the question of the special protection given to the growing of sugar in this country. The two questions involved are totally different. The two points we want to raise are, first, the abolition of the Sugar Duties in tato, and, secondly, the refusal to sanction this new special protection for home-grown sugar. I do not know what points the other Amendments raise, but from a hasty glance at them they seem to be protective in character. To the uninitiated this first Amendment would seem to be one which would indeed be lamentable as coming from the Labour party. It is, on the face of it, a case of the grossest protection. If the Customs duty were left in, it would be setting up a system of protection for refineries in this country such as has never yet been asked for even by the proprietors of the refineries themselves. I need hardly say that the Labour party in moving this Amendment have no intention of protecting home refined sugar. We are moving this Amendment, because we are perfectly well aware that, if we can get rid of the Excise, we can get rid of the Customs also, and thereby abolish the whole of these duties upon sugar. That is the intention of the Labour party—to abolish the indirect taxes upon sugar and thereby lighten the burden upon the whole of the consuming population of this country.
Every argument that has been used in favour of the abolition of the Tea Duty can be used in favour of the abolition of the Sugar Duty, and many other arguments. Not only is sugar the food of the people, and particularly of the children, but it is also the raw material of a very large number of industries in this country. Cheap sugar is the basis not only of human life, but also of a considerable amount of human industry in this country. I do not propose to descant on
the advisability of abolishing the Sugar Duty, or to refer to the fact that under this wonderful rich man's Budget £61,000,000 comes off the direct taxes and only £5,500,000 off the indirect taxes. There are plenty of hon. Members behind me who will state the arguments in favour of the abolition of the Sugar Duties. All I want to do, in opening this Debate, is to make it clear in the first place that the intention of our Amendment is not protective, but is directed solely towards the abolition of the Sugar Duties. The arguments in favour of that I will leave to my hon. Friends behind me. No doubt when the Chancellor of the Exchequer comes to reply, his argument will be that he has not got the money. After four years' experience of this Government, we have come to the conclusion that the only way to make this Government economical is not to let them have the money in the first instance.

Sir D. MACLEAN: It might be of service to the Committee if you, sir, could indicate the next two or three Amendments that will be selected.

The CHAIRMAN: The next two Amendments in the name of the hon. Member for the Moseley Division of Birmingham (Mr. Hannon)—in Sub-section (1), after the word "Ireland" ["beet grown in Great Britain or Ireland], to insert the words "and of a polarisation not exceeding ninety-seven degrees"; and, in Sub-section (2), after the word "paid," to insert the words
and also, with a view in the case of non-dutiable sugar and molasses entering a refinery working in band, that no duty shall be paid on delivery on such non-dutiable sugar or its equivalent"—
are in order, and I propose to call them. Then the Amendment on Clause 8 of the hon. and gallant Member who has just spoken (Colonel Wedgwood)—to leave out the words
having regard to the nature of that ingredient or part and to the smallness of its value in comparison with the total value of the article"—
will be in order, as will also the first two Amendments on Clause 3—to leave out paragraph (b), and, at the end of the Clause, to add the words
Provided, however, that the Entertainments Duty within the meaning of Section one of the Finance (New Duties) Act,
1916, as amended by this Clause, shall not be deemed to extend, and shall not apply in the case of any exhibition of a cinematograph film or films generally described as a 'trade show' where such exhibition is mainly or primarily attended by persons to view such film or films for the purpose of trade."—
but not the last Amendment—at the end of the Clause to add the words
(2) The Entertainments Duty payable under Section one of the Finance (New Duties) Act, 1916, and Section eleven of the Finance Act, 1918, where the payment for admission to any entertainment does not exceed twopence halfpenny, shall cease to be payable as from the fifteenth day of May nineteen hundred and twenty-two.

Colonel WEDGWOOD: Are we to understand that the Entertainments Duty will be discussed on these Amendments to Clause 9 or on the new Clause standing in the name of the hon. Member for West Leyton (Mr. Newbould)?

The CHAIRMAN: Clause 9 is a purely declaratory Clause, and no Amendment which involves substantive changes in the law will be in order.

The CHANCELLOR of the EXCHEQUER (Sir Robert Horne): It seems to me that the Amendment does not at all raise any discussion upon the general efficacy of the Sugar Duties. The whole point involved is that while the Clause proposes to exempt from Excise Duty sugar which is made from beet grown in this country, the hon. and gallant Member proposes to exempt from the Excise Duty sugar made from beet grown in other countries. The Amendment does not deal in any way with sugar as a whole, but purely with sugar made from beet. Therefore, the Amendment does not seem to me to raise the large question that my hon. and gallant Friend proposes to discuss. Accordingly, I shall deal with it as it stands and with the necessary restrictions which are imposed by the Amendment itself. I can reply to this suggestion almost in one sentence. If you exempt from duty sugar which is made from beet grown in other countries, it is perfectly obvious that you destroy the whole intention of the Clause itself. You would then encourage the importation of beet from other countries in order that sugar may be made from it to compete at an unfair advantage with sugar grown in other parts of the world. I cannot imagine that any seriously-minded Member wishes to bring about that particular
result, and, whether the proposal which we make in this Clause be bad or good, at least the proposal which my hon. and gallant Friend makes would be of the greatest possible detriment and injury to the sugar industry in this country. It would also have the effect of destroying a considerable portion of our revenue—not the whole £35,000,000 which he is anxious to get rid of—at present obtained from sugar, and, accordingly, on these two grounds, I would ask the Committee to reject the Amendment.

Mr. WATERSON: The Amendment has certainly left some of us who are not so familiar with the procedure of the House in quite a quandary as to whether we can debate the Sugar Duties, or merely the point raised by the Chancellor of the Exchequer as to the subsidies to British-grown beet and the sugar industry. I have no desire to depart from the ordinary course of procedure, but, so far as the Sugar Duties are concerned, I think I can safely say that there were many manufacturers and refiners in this country who were looking forward to a reduction. I remember, when the Budget was about to be introduced, receiving from a firm in this country a wire which I may be permitted to read. It was as follows:
Rumours here that Sugar Tax will be reduced, to operate on some deferred date. This would be serious mistake for everyone. Am prepared for reduction being effected from to-night. If deferred all the great inconvenience of preparation for reducing stocks, etc., will have to be repeated.

The CHAIRMAN: I think I must rule on this Amendment that the discussion will have to be confined to the distinction between Excise Duty on sugar grown at home and Excise Duty on sugar imported in this country and used for the purposes of manufacture in this country.

Colonel WEDGWOOD: This Amendment quite clearly goes to the root of the whole of the Sugar Duties as we know them. If we carry this Amendment, the Sugar Duties fall to 'the ground. Are we not therefore entitled, in arguing in favour of this Amendment, to show that the Sugar Duties as a whole are bad, and that therefore those who are voting for this Amendment are voting against the Sugar Duties.

The CHAIRMAN: If it be for the general convenience of the Committee to
take a general discussion on this Amendment, I am willing to acquiesce, but that discussion must not be repeated. If I allow a general discussion on the Sugar Duties, then, although the matter of the Customs Duty might be divided upon, the discussion could not be repeated. I can only allow a general discussion now on that ground.

Colonel WEDGWOOD: We put this Amendment down in this form in order to get the discussion taken when we should be in the House. We have a conference next week at Edinburgh, and we shall be mostly away. We wanted a discussion now, when we can take part, rather than later, when we shall not be able to be here.

Sir F. BANBURY: Is not the Amendment a direct negative of the Clause? If the Amendment were carried, the Clause would read:
The duties of Excise chargeable under Section nine of the Finance Act, 1918, in respect of sugar and molasses made in Great Britain or Ireland and (except as regards goods in respect of which the said duties have been paid) the Excise drawbacks and allowance under the said Section shall cease and determine as from the commencement of this Act.
That is exactly what the Clause does. This is a direct negative to the Clause, and should be brought up on the question that the Clause stand part of the Bill.

The CHAIRMAN: No, I think not. The immediate effect of the Amendment is to extend the operation of the Clause to all manner of sugar as regards Excise. It is in order if argued on the limited issue. If the Committee are of opinion that it would be convenient to take the general discussion now, I am willing to allow it.

Sir F. BANBURY: The words at the beginning of the Clause are
The duties of Excise chargeable under Section nine of the Finance Act, 1918, in respect of sugar and molasses made in Great Britain or Ireland.
Those words are still left in, and under those circumstances the only result of leaving the words out is that the duties in respect to sugar and molasses made in Great Britain and Ireland shall cease and determine, and that is really the effect of the Clause.

The CHAIRMAN: I think not. I read it otherwise. If the right hon. Baronet is right the words "as respects sugar and
molasses made from beet grown in Great Britain or Ireland" would be meaningless. I do not think they are meaningless, and I think the hon. and gallant Gentleman was fully aware of that when he asked the Committee to disallow any possible taint of Protectionism.

Mr. ORMSBY-GORE: I hope we shall have an opportunity later of discussing the question of the Customs Duty on sugar apart from this particular question of sugar produced from beet grown in this country. It can only be discussed on a new Clause, and if we attempt to discuss it here and now, on the mere question of beet sugar versus sugar produced from any other source, we shall not have a satisfactory discussion. I hope we shall keep this Amendment to the question of beet sugar versus any other kind of sugar.

The CHAIRMAN: If objection be taken to having a general discussion now, I am bound to rule rigidly according to the Rules of Order.

Mr. GIDEON MURRAY: Is it not a fact that you have ruled out my Amendment on the Sugar Duty because it was appended to a Clause which dealt with beet sugar and not with other sugar?

The CHAIRMAN: No. The ground on which I ruled it out was that this was a Clause which dealt with Excise and not with Customs. I only suggested a general discussion because it might be for the convenience of the Committee, it being somewhat difficult to discuss Excise Duty without the corresponding Customs Duty. As objection has been taken, I feel bound to rule narrowly on the matter that the discussion must be confined to.

Colonel WEDGWOOD: In that case I ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Mr. HANNON: I beg to move, in Subsection (1), after the word "Ireland" ["beet grown in Great Britain or Ireland"], to insert the words "and of a polarisation not exceeding ninety-seven degrees."
This Amendment is intended to help the Chancellor of the Exchequer to get a little more revenue. Its object is to confine the experimental stations which have been organised in this country for the production of sugar from beet to the manufacture of raw sugar. The sugar refining industry in this country is one
of considerable magnitude and highly specialised, and gives a large volume of employment to a great number of people. If the concessions which are contemplated in this Bill are given to these stations engaged in the manufacture of sugar from beet it will tend to deprive the sugar refiners of a considerable proportion of their activity and will inflict considerable injury upon the large number of people engaged in this industry. Up to the present the beet sugar industry has been in receipt of a subsidy of 6s. 2¾d. per cwt. It is now proposed to increase this subsidy to 25s. 7d. per cwt. Of course, the Minister of Agriculture, whose devoted loyalty to the farmer is becoming one of the assets of our public life, says quite cheerfully, "We are going to increase this subsidy from 6s. 2¾d. to 25s. 7d. a cwt," and he paints a beautiful picture of the wonderful achievements in the future of these sugar factories. But the right hon. Gentleman ought to remember, in so cheerfully subsidising these experimental factories at the expense of the British taxpayer, those who are already employed in the sugar refining industry and those enterprising people who have invested large capital in sugar refineries. The deficiency at Kelham in the year ending 31st March, 1922, as shown in their revenue account, was £103,509, and what the Committee is asked to do is to support a concession which reduces substantially the loss incurred in this experimental working. If, as a matter of fact, the Government had given the additional 19s. 5d. a cwt. subsidy which is now proposed in the Finance Bill to this factory, it would have been an actual loss last year of 263,000. Is it reasonable or sane public finance to spend money in that way at the expense of the taxpayer in order to prop up what is at best a purely speculative enterprise? I have been associated most of my life with agricultural experiments. I had a great deal to do at one time with the promotion of sugar beet growing, but I would be no party to the British taxpayer being invited to put his hand in his pocket and pay out to the tune of £60,000 or £70,000 a year in order to maintain experimental stations, of which no one can say they can work on a properly organised commercial basis.
The actual subsidy given under the existing arrangement to Cantley last year
was £26,700. The actual amount of subsidy proposed to be given to this industry is considerably in excess of the value of refined sugar without the duty, and all we ask is that these experiments may be continued, but continued by limiting their work to the production of raw sugar. My proposed 97 degrees of polarisation simply indicates that the sugar produced within that limitation shall be what is known as raw sugar. I do not want to discourage these people from making the trial, but I do not want their experiments to be conducted at the expense of another class of the community who are already doing very successful and valuable work, and I suggest that this Amendment ought to be embodied in this Clause, and the operation of these beet sugar experimental factories be limited to the production of raw sugar. Every Member of the Committee is all for the encouragement of agricultural development, but it ought to be encouraged upon lines which would not inflict an unfair burden upon the taxpayer, and do injustice to a considerable section. Then look at the position in which we are placed with regard to our own Colonies. If this subsidy, as contemplated in the Bill, is given to the sugar beet factories, you inevitably place them in unfair competition with our own Colonies, which we are always proclaiming our desire to help. My hon. and gallant Friend who has just come back from the West Indies will appreciate the significance of that observation. I do not think we ought to adopt any method of subsidy which would inevitably put us in conflict with our own people overseas, and I suggest to my right bon. Friend who is so desirous of saving the finances of the country, and so anxious to conduct the public administration at a minimum of expense, that here is an opportunity of preventing waste of public money on an enterprise which, at all events, up to the present has given no evidence of achieving success.

Mr. ORMSBY-GORE: While agreeing with a great deal which has fallen from my hon. Friend, I do not think he has explained very fully why he would select 97 degrees of polarisation. I believe, in regard to Canadian and West Indian sugar, the figure is 98, and this is the first time I have known the figure of 97 given in dealing with this matter. I do not understand what is the precise point of fixing 97 degrees as the test of what is
raw sugar and what is manufactured sugar, which I understand the hon. Member wishes to differentiate by this Amendment.. He thinks that, up to a point, we are justified in giving special assistance to the production of raw sugar from beet grown in this country, but that we should not encourage artificially and specially those people who are producing the raw beet sugar by going into a further process quite apart from their original process of producing something which is now produced from raw sugar imported into this country from the West Indies into a manufactured article. With that object I understand this Amendment has been put down. But whether he is right in fixing 97 degrees I very much doubt. I hope the Chancellor of the Exchequer will satisfy us on that point, because I know my friends in the West Indies are a little apprehensive on points of this kind. They have had experience of the introduction of figures of this kind in the working of the Canadian agreement, and they would like it satisfactorily cleared up that this fixing of 97 degrees is not a new departure in the making of a new standard of quality which may necessitate them in their operations changing the whole of their methods of manufacture.

Mr. WATERSON: This Amendment has given us an opportunity of discussing the subsidy which is being paid to Kelham and Cantlay. I am not prepared to give an affirmative or a negative answer to the question put by the hon. Member for Stafford (Mr. Ormsby-Gore). I cannot speak from the refiner's point of view. So far as the subsidy to the Kelham and Cantley factories is concerned, there is a consumer's point of view as well as a. taxpayer's point of view. A few days ago several of us bad the privilege of meeting the Chancellor of the Exchequer in his palace, and we attempted to put the position, so far as we thought it advisable, as to the complete dropping of the subsidies to these two factories. Our strong protest as consumers and as taxpayers is based on the fact that the proposed increase of subsidy is from 6s. 2¾d. per cwt. to 25s. 8d. per cwt. That amount is too great. We claim, first and foremost, that there cannot be any argument that can be put forward that would justify the attempt of the Government to sub-
sidise this industry, We are living in days when economy is the watchword, and here is an opportunity for the Government to save money. It will not be a hardship upon those involved in the industry, but will give these people an opportunity to use their genius in order to increase their own industry, so that there will not be any claim upon the taxpayers of this country.
As taxpayers we consider that it is essentially wrong to give such an inducement to Kelham and Cantley to continue making this sugar. The deficiency on 31st December, 1922, amounted, roughly, to £104,000, which has to be made up out of the country's revenue. Can my right hon. Friend say that the time is opportune for the spending of such a vast sum of money? He may say that it has a tendency to increase employment and to encourage industry that shall have a British basis. If he is going on these lines of giving subsidies to one particular industry he can no longer justify his action in refusing to give a subsidy to any other industry that asks for it.

Sir R. HORNE: I do not propose in dealing with this Amendment to discuss the whole question of policy, because I do not think it arises upon an Amendment which is confined to the refiners' interests. Accordingly, I do not propose to give to my hon. Friend the reply which he would expect that in courtesy I should give to him. I should imagine that he could bring forward his argument upon the Motion that the Clause stand part.

The CHAIRMAN: As I understood the speech of the Proposer, he wishes to qualify the reduction of the Excise Duty on the ground that the relief is excessive. I hardly see that I can rule out the argument as irrelevant.

Mr. WATERSON: I am desirous of concurring in your ruling, and am anxious to meet the statement made by the Chancellor of the Exchequer. He generally attempts to meet us somewhat fairly, and I try to meet him on reasonable grounds. I thought that this Amendment gave us an opportunity of raising the question of the subsidy. Those who are familiar with the industry at Kelham and Cantley will remember that so far as Cantley is concerned, in one part of its history it only started in 1912, and after three years
working it proved a failure and was closed down. It was reopened in 1920, on the ground that a preference was given to it in the form of a subsidy by the Government. At the present time Cantley is barely paying its way, even with the subsidy. If Cantley cannot make a profit and make ends meet, even with the gift of 6s. 2¾d. per cwt. upon its production, it should be closed for a second time. It not good business for the taxpayers to carry the shareholders of Cantley upon their backs. When we have proposed Amendments with the object of promoting social reform and to removing many difficulties with which the working classes have to contend, the first argument of the right hon. Gentleman has been that we cannot afford the money; that it would amount to a subsidy, and that industries must stand upon their own basis. Is my right hon. Friend prepared in this case to let this industry stand upon its own basis, without subsidy? He will probably say that he is prepared to support British enterprise, and British initiative and British capital. Is he aware that many of the shareholders of Cantley are Dutchmen? If we are to enter into the question of giving the subsidy for British enterprise, we ought to say that where British money is taken from the British taxpayers it should go into British avenues, in order to encourage British trade.
What is proposed this year means that Kelham and Cantley will receive in subsidy an amount which is more than double the value of the sugar that either of these factories produces. The subsidy that the British taxpayer will have to find will be a greater amount than the total value of the sugar produced in these factories. That is extremely bad business, to say the least of it, it is bad statesmanship, and I appeal to the right hon. Gentleman to reconsider his position in the matter. I cannot speak for the refiners, but I am informed on good authority that the English refiners to-day are melting what is known as Cuban raws. These raw sugars, which are grown in Cuba, are conveyed to the refineries in the United Kingdom, and they are offered upon the market, after being refined, at the rate of 22s. 6d. at the door of the refinery, and yet you are offering a subsidy to these two factories at the rate of 25s. 8d. per cwt. How can business be conducted in that way?

Major MOLSON: Is the subsidy 25s. per cwt., or 25s. per ton? One speaker has mentioned one figure and another has mentioned another figure.

Mr. WATERSON: It is 25s. 8d. per cwt. The gift on last year's production at Cantley of 4,300 tons of sugar amounted to £80,000, raising the total gift to Cantley, based on last year's production, to the large sum of £114,000. The position at Kelham is slightly different from that at Cantley. At Cantley the private shareholders benefit or suffer according to the trade profits which are made, but at Kelham there is a different situation. The private shareholders, au matter what happens at Kelham, are entirely protected and safeguarded until 1930. Their 5 per cent. interest is entirely safe until that time, and it has to be drawn out of the revenue of this country. All the losses that they are compelled to deal with at that place fall upon the taxpayers. If Cantley has cost the taxpayers £114,000, what have we to hope for if the desire of these people to establish 50 factories is realised? We shall want a new Chancellor of the Exchequer to secure the revenue, or at some future time we shall have a Chancellor of the Exchequer telling us that he will have no Sinking Fund for that year. We cannot go on in this way. It is not sound business. My right hon. Friend may say, "What about the men who will be thrown en the streets? What about the blow to the agricultural industry"? I admit that those are excellent points, but when they are examined and analysed he will find that much more good would be done and more benefit would be yielded to those who are engaged in the industry by setting up an industry that can be more fruitful than the one on which the subsidy is granted. I appeal from the consumers' point of view, and particularly from the taxpayers' point of view, that the right hon. Gentleman should reconsider the position, and that he should allow this industry to stand upon its own legs. If you are to subsidise these industries you must subsidise others. If the right hon. Gentleman wants to end the subsidies, he must end them at the earliest possible moment.

Mr. G. ROBERTS: I think that, my hon. Friend is wrong in some of his assumptions respecting the Cantley factory. Neither Cantley nor Kelham has
received anything as yet. This proposal cannot be operative until this Bill is passed. I gather from his observations that he was of opinion that the Cantley factory had already received a subsidy from the State. The Amendment before the Committee was obviously put down in the interests of the refiners. They are naturally apprehensive. For my part, this seems to imply a confidence in this new industry, which is not traceable in my hon. Friend's speech, because unless the industry does develop on very large lines the interests of the refiners will not be affected. It is true that if the industry does develop on the lines that are now projected, and if it becomes a big, industry, of necessity the interests of the refiners will be affected adversely. There is no secret about it. This Committee requires to know the facts. Under the new processes which are now in operation at Cantley and Kelham refining is carried on as part of the general operations. It is a continuous process. You make and refine sugar in a modern sugar factory. It is obviously most uneconomic—this is apart from the particular merits of the policy—to convey beet to the factories and restrict the manufacture to raw sugar, and then have to transport the raw sugar to a refinery, refineries in this country, being mainly situated at a port., because obviously they have hitherto dealt exclusively with the imported raw sugar.
My hon. Friends who represent the refiners are entitled to be apprehensive, in the event of this home-grown industry developing, that their interests may be affected. It will be a matter of slow and gradual development. Nevertheless, they are entitled to take the fact into consideration. On the other hand, looking at the matter from a broad point of view of the economic conduct of an industry, the application of the Amendment would be a most undesirable thing. I would simply say to them that the prospects, even if much more hopeful than they are now, are such that they need not cause the present generation of refiners serious alarm. There will still be plenty of raw sugar in the country for the refiners to work on. In fact, I do not see that that part of the business will be materially affected for a number of years.
With respect to the remission of duty in the case of the factories at Cantley and
Kelham, of course this does raise a great question of policy. I am appreciative of the way in which it has been introduced and debated in this House. For my part, I have long approved the policy. It is one that has been adopted intentionally by Parliament. I was a member of the Sub-committee of the Reconstruction Committee of the Government, presided over by Lord Selborne, which recommended to the Government that an experiment should be carried out in the growth of sugar beet in this country, and the manufacture of sugar from the beetroot. Ultimately the Government decided to assist a number of private individuals in the carrying out of such an experiment. Now it has been proved so far, as I anticipated is always the case in a new industry, that you must have a number of years' experience before you reach economic production, but we have at least proved this. One of the earliest objections which we used to encounter was that the soil of this country was not suitable to the cultivation of sugar beet. We have proved on the contrary that sugar beet is grown in this country equal to, and I believe better than, that of almost any other country in the world.
Moreover, the growth of sugar beet is a real help to agriculture. You introduce into the. rotation a crop which is profitable to the farmer. I do not profess to be an expert agriculturalist. I have made many speeches on agriculture, and perhaps because of my limitations of knowledge I have preferred to speak with greater authority than others who have more wider and intimate knowledge, but no one aware of the facts will dispute that in the rotation in England there must be either a fallow or a root crop, and that the farmer has had to grow a root crop which was a dead loss to him, and he had in the course of the rotation to make up, in his profits, for the dead loss on the crop which was essential to the cleaning of the land. But sugar beet introduces into the rotation a crop which has the quality of cleaning the soil, and it is also one which gives a profit to the farmer. He has a ready market. He will not produce unless you give him a definite contract to take his beet at a particular period, and this in itself is a real advantage to agriculture. Moreover, it does bring large numbers of persons on
to the land. I have friends in my locality who have worked out the figures for me, and in the course of last season's crop there was a general expenditure of at least £8 per acre on actual manual labour on the land. My hon. Friends, in this connection, will recall come of the arguments which they have used. They have told the Government that it is much better to put men in employment, even uneconomically, rather than have them draw the dole without doing anything for it. I recognise the difficulties, but here we have taken some step in that direction, and last year we had employed on the land several thousand men who otherwise would have been in the ranks of the unemployed.

Mr. WATERSON: Several thousand is rather many. Could we have the figures?

Mr. ROBERTS: I want to be as accurate as I can. There were a thousand additional labourers employed on the land. That is in the cultivation of 7,937 acres last year. That is for the two factories, and the average wages were per acre. We have ascertained £63,500 the books of the two factories that £63,500 were paid out on labour in the production of sugar beet for last year's crop.

Mr. WISE: Are the two factories amalgamated?

Mr. ROBERTS: No, they are not. It is well known that I am closely connected with one of the enterprises and everyone will relieve me of even the suspicion of trying to make any private profit out of it. So far as profit is concerned, it is the worst venture that I ever made in my life, but my interest is in the development of the land. I believe that it is going to be a real contribution to applied agriculture in this country. While I say that, I assure the Committee that what we are doing is simply done out of considerations of the public policy, and I ask them simply to accept the assurance that I derive no private profit out of it. As soon as it appeared certain that a loss would be incurred, as a result of operating the season's crop, my colleagues met and decided to abolish all payments to directors, and since then we have all been working without any fees and paying all out-of-pocket expenses in visiting the works and farms, so that I hope that my colleagues and myself shall not be charged
with looking after private profit. In my opinion it is a good thing for agriculture. Everybody must be aware of this further fact, which I will not elaborate, that our country needs, and in my opinion must have, sound agriculture. World conditions are constantly changing. It is the policy of every country to avoid the lopsided development which has characterised this country for very many years in the development of its agriculture and its industry. Your Dominions are doing it, and rightly doing it. We do not attempt to interfere with the fiscal development of the Dominions, and of the overseas dependencies, and accordingly we expect that they will not interfere with any arrangement which we deem it desirable to make.

The CHAIRMAN: The right hon. Gentleman is going away somewhat from the particular subject of home-grown beet sugar.

Mr. ROBERTS: I will endeavour to keep within the limits, but I thought that the whole policy had been opened up in the course of this Debate. I will certainly obey your suggestion and keep close to the point. As a result of the operation of these factories it was found that they could not, during the experimental stage, continue to pay the heavy duties. As my hon. Friend stated, Cantley started in 1912, and worked for two or three seasons, I am not sure which, but it is not accurate to say that the factory was closed down because it failed to make a profit. It had to close down because the War was on, and the Dutch Government, from whom seed was previously secured, forbade the exportation of sugar beet seed from that country, and Cantley was consequently closed down. Cantley, undoubtedly, has been very efficiently conducted. I can see the point and the danger that, if the remission of the duty was simply to tend to the advantage of foreigners, however good their relationship may be with us, there would be a strong point of criticism.
5.0 P.M.
First of all, I think that we are indebted to the Dutchmen for having introduced the industry into this country. It is recognised that, in order to carry on the industry economically, the two enterprises ought to be amalgamated, and we are now engaged in endeavouring to
effect that policy. The Dutchmen will have no hesitation in putting up the necessary capital in order to carry out this policy. We, on the other hand, are concerned that the enterprise shall be carried on by British capital and be a British sugar-beet industry, and be that alone. That is the policy which we are endeavouring to carry on. Much criticism has been advanced respecting the result of the first year's operations at Kelham. Cantley I do not know as well. They are certainly in a better position than Kelham because of several years' working, and because they have at their disposal experts who have been engaged in the growth of beet and the manufacture of sugar. It is very largely that expert assistance which will he placed at our disposal in the event of amalgamation taking place. In respect of Kelham, you must bear in mind that we built under the most adverse circumstances. It is a legitimate point of criticism to say that the enterprise ought not to have been started at that particular moment, but if we carry our minds back, we know that at that time everybody was urged to develop business in order to provide employment and to assist reconstruction. We recognised that we were starting a new industry, and that very few of us had actual knowledge of the working of a complicated sugar factory it would be well to pay a visit to the factory to see the elaborate machinery required for the production of sugar. We decided to go on. Indeed, the plans were in readiness before I joined the enterprise. But I think my colleagues were perfectly right. First of all, they foresaw that there was some danger that the machinery might not be ready, and the works not even completed. Therefore they limited the programme and estimated for about one-half of the crop that could be operated in a factory of that size. Contracts with the farmers have to be made in October and November for the beet of the following September or October. The price has then to be fixed and you have to make the contract on that basis. I admit that we paid too much for the beet, but at the moment none could have foreseen the great cut in prices which was to ensue in the following year.
With regard to the factory, we were very soon hung up with labour disputes.
We had then to pay heavy sums in order to persuade the men to get on with it. I have stated in this House that, whereas we were in need of between 50 and 60 bricklayers, we could get only 15 or 16 at a time when we were told that unemployment was rife. Those were some of the difficulties. The result was that we had then again to cut down the programme, so that the factory only operated at one-third of its capacity. Everybody knows that it cannot be an economic proposition on that basis. But we were experimenting, and we felt that everybody would be reasonable enough to recognise that in establishing a complex industry of this character some years must elapse before success could be reached. It is not only a question of public money being granted, if the policy is a good one. I know of men who have ventured large sums and have already lost heavily, with no possibility whatever—with the remission of duty or otherwise—of recouping themselves. Therefore it can never be said that they have benefited by the remission of duty. The Government have recognised the strength of the case. They feel that it is an industry which ought to be established. They realise that this money goes to the development of agriculture and the provision of employment. I have every reason for believing that in the course of a few years, with the aid of this remission—bearing in mind that every country with which we have to compete has built up its sugar industry on aid from its own Government—we will have established in this country, on a sound basis, a sugar beet industry which will develop rapidly. I know that there are already schemes in existence for the creation of new factories, so great is the confidence already inspired, among agriculturalists and others, in the prospects of this industry.

Sir GODFREY COLLINS: While the Committee has appreciated the arguments and the facts which the last speaker has addressed to them, I wish to refer more specifically to the Amendment under discussion. I share some of the difficulty experienced by the hon. Member for Stafford (Mr. Ormsby-Gore). I understand that if the words of the Amendment are inserted in the, Clause sugar grown in this country, which passes through the refineries in this country, will not pay the Excise Duty. That will have
the effect of placing the refining industries at Greenock, London and Cantley on an equality. If the Amendment is carried the Government subsidy will be paid to the farmers for growing sugar and the refineries in different parts of the country will be on an equality; that is to say, they will be treated alike by the Chancellor of the Exchequer. This is not the time for the outpouring of public money to the farmers of the country to encourage them to grow beet sugar or any other commodity. With one aspect of this subject I will deal later when the question before us is that the Clause stand part of the Bill. If the hon. Member who moved the Amendment goes to a Division meanwhile I shall be unable to support him in the Lobby.

Mr. WISE: I am sure we all appreciate what the right hon. Member for Norwich (Mr. G. Roberts) has told us about Cantley and Kelham. I had an idea that an amalgamation was going through and that if that amalgamation succeeded there was a chance of the Dutchmen subscribing more cash and therefore, possibly, saving the British Government. I do not think the bounty referred to by the hon. Member for Greenock goes to the farmers. It goes to support the factory. One of the great crises in 1914, when War broke out, was our position with regard to sugar. We must be careful it does not recur again. These factories, especially that at Kelham, should be supported, but I am not anxious that they should be supported by further Government money. The great thing to consider is the shortage of sugar at the present time and that that shortage—it is about 50 per cent. down compared with 1914—may put a factory such as that at Kelham and Cantley in a position to make both ends meet. With regard to employment, I have always understood that the factory worked for only three months in the year. Perhaps the hon. Member for Norwich can inform us on that point?

Mr. G. ROBERTS: The sugar factory can work only three months of the year. It has to take the beet when it is ready, for beet deteriorates if kept. The factory, once started, works throughout the 24 hours for seven days a week, and, taking the number of hours worked, it is approximately an ordinary working
week. Many endeavours have been made to utilise the factory in other parts of the year, but so far without success.

Mr. WISE: We must realise that the total output of sugar beet in this country is only 1,850 tons, which is very low. We have been told that the factory has worked to only one-third of its capacity. I hope that the output will be increased, so as to reduce the cost, and possibly in that way a certain amount of the Government subsidy could be saved. At the same time I support, as far as I can, a scheme of this sort to get new industries established in this country, but, as I have stated, I am not very anxious that the Government should give financial support.

Mr. LYLE: In the ordinary course I would not have taken part in this Debate. The right hon. Member for Norwich (Mr. G. Roberts) has very frankly stated his position and has put the case in his usual able manner. It is only fair that the British refiners' point of view should be stated. There are one or two points in the speech of the right hon. Gentleman which I must controvert. He has spoken a great deal about the benefits to agriculture and the enormous number of men who have been or will be employed in the agricultural industry. But, surely to goodness, it is possible to employ a great many men in any industry if you are going to bolster up and subsidise that industry! It is not necessary to mention agriculture only. I personally confess to being one who wishes to protect British industry, if it can be done fairly. It is quite easy to give instances of many trades and industries where one could employ a great number of men, in addition to those already employed, if that trade or industry was subsidised. There are all the arguments on the other side, whether you do not lose more in one way than you gain in the other is another matter. I will leave that point. All of us want agriculture to prosper, and, speaking from the point of view of the British sugar refiners, I say we certainly do not want to put any spoke into the wheel of industry. The right hon. Member for Norwich said it was a mistake for hon. Members on this side of the House to think that Kelham and Cantley had already received any
money from the Government. What he meant was, no doubt, that they had not received the enormous subsidy which is proposed by the Government to-day. But they have been receiving the preference and benefit of 6.;2¾d. per cwt. They have been receiving the preference which the Colonial is getting, and an additional 2s. 4d., so that altogether these Kelharn and Cantley factories have been in receipt of a benefit of 6s. 2d. per cwt. over their competitors, and in spite of this benefit they have not been able to make things pay. It is very unfortunate, but they have not been able to do it. This Amendment which we have put down limits them as to the quality of the sugar which they should turn out. It limits them to this extent, that they may turn out sugar of a polarisation of 97 only. The hon. Member for Stafford (Mr. Ormsby-Gore) asked why that figure had been selected. We do not put that figure as an absolutely rigid figure, but we want to prevent the British beet-sugar grower from getting a benefit of £25 13s. 4d. a ton over the British sugar refiner, and we had to put down some figure to mark the difference between raw and refined sugar. The hon. Member criticised the figure somewhat, but I have been looking up the figures in our own factories, and I find the polarisation of the raw sugar which we receive is between 95 and 96. I would be quite prepared to alter that figure of 97, but we deliberately put it high because we did not want to exclude any of the sugars which were coming over from the Colonies and from other parts. The right hon. Member for Norwich suggested that it would be a retrograde policy for any beet sugar factory not to go to the full length and produce white sugar. I entirely disagree with him. Previous to the War I do not think there were more than five factories in Germany and Austria which turned out white sugar. I admit that the position is different in France, but still it is not at all necessary to turn out white sugar, and I challenge contradiction on the point.
We do not wish to put any spoke in the wheel of an infant industry. We should like to see the industry prosper, if it can be made to prosper as a commercial undertaking; but we do not think it fair or right to bolster up and to prop up an industry with the undreamed of protection of £25 13s. 4d. per ton. In the past we British sugar refiners had to fight the
German bounty system, which gave a direct bounty on every ton of sugar they exported to this country, and we managed to survive it; but we would have been delighted if we had had protection to the extent of 6d. per cwt., and for a protection of 1s. per cwt. we would have thrown our hats into the air. These people have been getting, not 6d. or 1s. per cwt., but a protection of 6s. 2d. per cwt., and they have not been able to make it pay. Now they are not only to get the 6s. 2d. per cwt., but a protection of £25 13s. 2d. per ton, which is 25s. per cwt., something which absolutely flabbergasted everybody who heard it.
No doubt this thing was entered into by the Government without full consideration of what it meant. If I may say so, with great respect, they did not understand the position, or perhaps they thought the Sugar Duty was going to come down, and the remission of the Excise Duty would not, in that case, have been the enormous concession which to-day it appears to be. As the Committee knows, it was announced in a speech by the Minister of Agriculture, who, probably, was not too well informed about it. He said the Government had decided, in view of the exceptional circumstances of the new industry, and of the position of unemployment in the country, that no Excise Duty should be charged to home-grown sugar. That was the first intimation we had of it, on 30th March. I really think he did not realise what he was saying when he was committing the Government to give £25 per ton protection. What is to be the position as to unemployment? Presumably, you are going to employ more people in agriculture and in the sugar-beet factories, which are going to turn out white sugar, but I say that for every man you put into a sugar-beet factory you are going to take away a man from the British sugar refineries. The British sugar refiner has been able, in the face of the sternest competition, to compete with his business rivals, and his is a business which—without wishing to blow one's own trumpet—is fairly efficiently managed. You are going to replace a man in that business by a man placed in a business which is highly speculative and which, even with a benefit of 6s. 2d. per cwt., has not been able to make its way.
Many of us feel that the Government rushed into this question partly because they were pushed by the Minister of Agriculture and partly on unemployment. They did not quite realise what they were doing. Also, there are many of us who feel the Government are taking this action partly because they have already invested certain money in the business, and having done so, and having found it is not a paying business—not business which can stand on its own legs—they are going to throw good money after bad. From the strict point of view of the Amendment, we say that if you are going to protect this industry, if you are going to try and bolster it up, and if you think sugar beet growing can be undertaken in this country, give it protection, but do not do it at the expense of the old established industry of the British sugar refiner. We say it is a monstrous injustice to give them a protection of £25 a ton on white sugar, and we suggest in our Amendment a fairer method. I do not say that the figure 97 is a permanent and definite figure, but it is a good figure, and I should be prepared to defend it. If you are determined to give this enormous protection, we ask you to do it in a way that will not ruin an old business which is already established.

Sir R. HORNE: I do not propose to enter into the wider field which has been opened up, but to devote myself entirely to the point which has been raised in the Amendment, and I hope another opportunity will come later on for other matters.

The CHAIRMAN: I can only say to the right hon. Gentleman what I have said before, that we cannot have two discussions on the same subject. I could not allow a discussion on the question of Kelhana and Cantley to take place on the Clause after it has already taken place.

Sir R. HORNE: I bow to your ruling. I shall say a word or two on the general question; but let me deal first of all with a matter raised by the Amendment. My hon. Friend who proposed the Amendment indicated in a very interesting speech that he was very anxious that nothing should be done to injure an infant industry. He was perfectly clear that, in principle, he had no objection whatever to what was proposed to be done, and the only topic which he raised was the particular interest of the refiners in this country as against the in-
terests of the people who are managing this infant industry. His solicitude, I found, very rapidly disappeared, because the comments which he made revealed the fact that what he proposed to do would effectually kill this infant industry—as effectually as if nothing had been done to give it any help whatever. His proposal contained the suggestion that only sugar of a certain polarisation should be produced in these factories. My hon. Friend is very well aware that while the practice in past times may have had the result of producing only raw sugar in certain sugar factories, that modern practice. has gone—as one would have anticipated it would, having regard to the development of every other form of business—in favour of uniting the production of raw sugar with its refining.

Mr. LYLE: I challenge that statement. Of Austrian and German sugar-producing factories before the War, not more than five or six turned out white sugar.

Sir R. HORNE: Of course, I bow to the superior knowledge of my hon. Friend in this business, but what he has said really only confirms what I have just stated, because in point of fact the tendency has been towards amalgamating these two processes, which can undoubtedly he carried on side by side. Whether that practice is right or wrong, it is enough for me to say that these two particular factories have been equipped with refining machinery as well as the machinery used for the production of raw sugar. It is impossible in their case to say that you can make it a paying business by confining them to the production of raw sugar. The capital charges which they have incurred by equipping their factories has made it absolutely impossible for them to carry on a profitable business if they produce only the raw sugar and do not proceed to refine it.

Mr. LYLE: Does the right hon. Gentleman know whether either of these two factories has a single particle of charcoal, or any charcoal plant? Are they in any sense equipped as refineries?

Sir R. HORNE: I cannot answer my hon. Friend with regard to the details of the particular plant, but that they do produce refined sugar, I suppose, my hon. Friend will not deny, because the whole object of his Amendment is to
compel the sugar they produce to be sent to refiners to be refined. The reason he is anxious to get this Amendment passed is that the refiners should get the business which at present is being done by these factories themselves.

Mr. LYLE: Because you are giving them a protection of £25 per ton?

Sir R. HORNE: My hon. Friend should confine himself to the point I am at for the moment. The issue between us was whether these factories could produce refined sugar or not. I think I have demonstrated to the House—despite the anxiety of my hon. Friend who now seizes a different argument on which to reply—that they do produce refined sugar and are equipped for that production. It is impossible to say in that case that they can carry on a profitable business, if having put up plant for producing refined sugar, they have to start a process which falls short of that and then have to convey all their sugar to the refinery. The point made by the right hon. Member for Norwich (Mr. G. Roberts) is cogent and irresistible. By doing so they would not only forego the profit they could make on the refining, but they would add to their charges by conveying all the raw sugar to the factories by rail covering great distances.

Mr. LYLE: That has to be done now.

Sir R. HORNE: They have to convey the sugar when they are marketing it, but that is a totally different thing from sending the sugar a distance to be refined. I listened to my hon. Friend's speech and I would remind him that one does not advance one's arguments by interruption. What I desire to say is that undoubtedly this would enormously increase the charges to these factories not only by what they would have to forego, but also by the extra cost, which they would incur. The difficulties of their present position have already been made plain. A great part of the speech of my hon. Friend dealt with the fact that to-day they are working at a great, loss. What then is the fear that the refiners have that anything will be taken away from them by what they call the large subsidy at present being granted? In point of fact, it is not a subsidy at all it is only a remission of Excise Duty. There is no question at all as to the effect of this Amendment. If it
is passed, then these factories are doomed as surely as if we gave them no aid whatever.
I turned to the larger question which has been opened in the course of the Debate, but only for a moment, because the matter has been very thoroughly threshed out. This suggestion of a remission of Excise duty is by no means new. When the sugar beet industry in this country was first started, the Excise duty was remitted by a Liberal Government, which, as everyone knows, on these matters always gives the pure milk of the true economic word. The Excise duties were only put on in the year 1915, when Mr. McKenna was Chancellor of the Exchequer, because of the fact that under the Sugar Convention we were bound to impose them. Mr. McKenna, in dealing with the matter, stated that but for our obligations under the Convention he would not have thought it worth while to impose these charges. Now we are in a position in which nothing is to be gained by continuing them. If we exact these duties to-day it is as certain as that we are here that neither of these factories can carry on. Accordingly, the Exchequer has nothing to gain by exacting these Excise duties, because there would be nothing to come from these factories. I was approached by a very responsible deputation, representing both employers and workpeople connected with this industry, and it was very strongly urged upon me that unless this was done, and a concession granted to the extent to which the Government is proposing in this Clause, the industry would disappear. The Government had to consider what action they should take. It had been made perfectly plain that, so far as capacity to grow sugar beet is concerned, the soil of this country is in no way inferior to that of any other country. We had to consider whether, in these circumstances, there was any reason why this industry should not be a success in this country.
It was pointed out that the growth of sugar beet has not only been a great cause of profit in connection with the sugar industry in Germany, but that it also had the effect of enormously advancing the farmers' profits. As the right hon. Member for Norwich has explained, having a sugar beet crop as one of the crops in rotation, not only has the effect
of giving the farmer a profitable crop, but leaves in the ground elements which greatly enrich the soil and enables the farmer to get a better crop of cereals in the following year. These were considerations worthy of attention. Was there any reason why the manufacturers of sugar here should not be able to compete with the makers of sugar in Germany and Austria? So far as appears, there is no reason, except that in this country it is an infant industry and has not yet acquired the necessary experience to engage effectively in competition. It has the effect of employing a larger number of people on the land and of giving employment to the large number of people who go to these factories. Were we to forego these benefits, especially after we had made a start with the industry, and when it had been acquiring a certain amount of experience and had collected round it a number of men who had become practised in the operations of the industry? I think the Committee will agree with me we came to the right conclusion. I have no doubt that if my hon. and gallant Friend the Member for Leith (Captain W. Bonn) is going to speak after me upon this matter, he will give us some of the ancient shibboleths of the economic doctrine to which he adheres, as to the support and protection of industry. I would remind him that all the economists whom he professes to follow in the doctrine which he so often advances in this House, have made at least one exception in the case even of Protection, and that is with regard to infant industries. I would refer him in particular to a long and eloquent passage in John Stuart Mills' work on Political Economy, in which he sets forth the great advantages to be obtained from Protection by the State of an infant industry which has an opportunity of acquiring natural growth, and in the end standing upon its own feet. If this industry does not justify in the future that test, then undoubtedly it must cease to have the support of the State.

Mr. SPENCER: How many years will you give it?

Sir R. HORNE: At any rate, under present conditions, this is not the time to give up an industry which at least has made a promising start but has been hit by the extraordinary circumstances which have arisen in connection with the sugar industry in recent times. In particular
this is not the time—if this industry has any chance for the future and has already so much capital embarked in it—to deprive people of employment until it is shown to demonstration that the industry is unfit to afford profitable employment in the future. Accordingly I ask the Committee to reject the Amendment.

Captain WEDGWOOD BENN: The right hon. Gentleman anticipated, as he thought, some arguments which I was to bring forward. I shall submit whatever arguments I have, in my own words to be judged by the Committee on their merits rather than on the prejudice which the right hon. Gentleman sought to import in advance. The right hon. Gentleman received a deputation from the employers and the employed in this industry pointing out that it would be a great advantage if they could receive a benefit from the State amounting to £25 per ton.

Sir R. HORNE: The deputation which I received was not only from people immediately connected with the industry but was also representative of the whole agricultural industry of the country. It also represented agricultural labour as a whole and not merely to those employed in this particular industry.

Captain W. BENN: I should like to know what industry would not be prepared to get up a deputation to the Chancellor of the Exchequer if they thought they were going to get some remission of taxation. Of course, any industry would do so. Nobody doubts that an individual industry may benefit by some such measure as this, but the point is whether the public benefits in the way that private interests benefit. The right hon. Gentleman says this is an experiment. He says, first of all, that the duty imposed will yield no revenue, and, therefore, there is no harm in its remission. That is not an argument which he applies all round. There are many industries complaining that they cannot afford the taxation imposed upon them. They say they will perish, and some of them actually do perish, because of the taxation. But that makes no appeal to the heart of the Chancellor of the Exchequer. He says, "No, there is the duty; it has to be imposed, and if you cannot meet it you must go out of business." In the second place, he says that we should try
this experiment for a certain number of years, and submit it to the test of time. What will his answer be when that test has been applied? We have had experiments of this sort tried before. The Motor Car Duty is a case in point. Immediately it begins to yield revenue the. Chancellor will come forward and say, "I am really not dealing with the general question of Protection, but this yield is a thing I cannot forego, owing to the needs of the Exchequer." Either there is no yield, and it is not worth while raising the question, or else there is a yield and he cannot forego the revenue. It is just another step in the Government's preconceived plan of a stealthy imposition of Protection in this country. [HON. MEMBERS: "Hear, hear."] Exactly. The hon. Member for East Birkenhead (Mr. Bigland) understands that perfectly well, and, of course, the Minister for Agriculture also understands it perfectly well. There is now a majority of Protectionists in the Cabinet, and they are striving in every way to impose a Protectionist system on this country. The only wonder to us is that they continue to receive the support of their so-called Free Trade followers and colleagues.
The proposal to remit this Excise duty has already done a good deal to destroy that feeling of gratitude on which the scheme of Imperial Preference is supposed to be based. We know quite well that protests against the remission of the Excise duty have been received from producers in the Dominions who did not receive anything like the advantage which is about to be offered to small factories in this country. The right hon. Gentleman says we must have regard to the number of persons employed. Can he tell us, are there as many as 1,000 people employed in this industry? The number is said to be only 800 or 900. His argument was immediately devastated by the lion. Member for Stratford (Mr. Lyle), who pointed out that for every man you put into this failing and unsuccessful industry you have put a man out of work in a successful and prosperous industry. That is the story of Protection all round—supporting people who have not got the strength to support themselves and throwing out of work people who are in industries which can bring profit to this country. I should like to ask the Chancellor of the
Exchequer some questions. The first is, who are the holders of the shares in the Kelham factory? Of course, it is these shareholders who will benefit. Are they British nationals at all? Are the majority of the shares held by British nationals, or it is true that the majority are still held, as they were a few months ago, by foreigners? Would it be right to say that 133,000 out of 140,000 shares are not in the possession of British subjects at all? Because it does seem rather a pity that, if we are going to give this enormous bounty on the ground of some inscrutable patriotism, the bounty should not come the way of people of this country. Would it be correct to say that part of the shares are actually held by Austrian aliens? Would it be correct to say that part of the £25 per ton is to he given to the Administrator of Austrian property in England? If so, what becomes of this plea that we must give this great bounty to foster an infant industry on which the future life of this country depends?
Is it a fact that it is either this, or that the money, amounting to £325,000, which the Government have sunk in this commercial industry, is going the same way as that on celluloid and dyes, and all the other industries into which they have put the public money of this country? Is it true to say that if they do not get this bounty, the Board of Trade will be compelled to tell us that the 250,000 shares are worthless, that the taxpayer must find the 5 per cent. on the other 250,000 until 1930, and that the 125,000 second debentures which the Government hold are worthless? Is that the alternative? Is this really a sort of hotchpotch of ineffective protection, combined with a shrewd stroke of business on the part of the Government so as to make their experiment with public money appear more successful? If this be done for one industry, why not for other industries? My Noble Friend the Member for Aldershot (Viscount Wolmer), if I recollect, actually appealed for the remission of Excise Duty on home-grown tobacco. Why not? What fairness can there be in allowing yourself to be moved to make a concession with public money to so substantial an amount to one deputation, when I am perfectly certain the Noble Lord could bring just as influential a deputation on behalf of his plea?
That brings me to the final argument against this. Either it is a small, weak and futile manœuvre, or else it is the beginning of a system of depending on this country to some large extent for our supply of sugar. If that be so, it seems to us that it is the beginning of the most offensive of all protective taxes, that is, a protective tax on food—in fact, it means that this is another step in the direction indicated by the Leader of the House when he said, referring to the policy of his distinguished father, who advocated food taxes, that the day was come when these taxes would be imposed.

Major MOLSON: I would like to say a few words on this question of home-grown sugar. I would not have intervened, except that I do think this matter has been coloured, and made a very technical question, when it might be confined to two or three points. One is that it is of great advantage to agriculture. Last February I wrote to the Ministry of Agriculture for constituents of mine on behalf of this very industry. We have heard a great deal about the subsidy, but the Excise Duty on the value of the sugar has not been mentioned. I have the figures which, I believe, are perfectly correct. On one ton of sugar, valued at £27, the Government were receiving an Excise Duty of £19 8s. I do not think any commercial undertaking can possibly exist which has to pay a tax of £19 8s. on a value of £27. From the point of view of agriculture, this industry employs many agriculturists, who would be otherwise thrown out of work, from October to December. It is a particularly good crop for cleaning the land. Further than that, the Government were asked to invest money to re-establish industries, and they have invested Government money in these factories. Surely, then, it is rather bad business for the Government to ruin its own shares. I am not at all interested in any of these undertakings, but I think many Englishmen have invested their money from a patriotic motive, and it would be a mistake to cause them to lose money in that way.

Mr. ACLAND: I am afraid that I am not quite so strict a Free Trader as my hon. and gallant Friend who sits beside me, and, therefore, I look at this matter primarily from an agricultural point of view [An HON. MEMBER: "A landlord's!"] I pre-
fer to say "from an agricultural point of view," and from that point of view I have come to the conclusion that there is not a single argument to be said in favour of the Government on this matter. I have considered it as it has been laid before the Agricultural Committee and other bodies by deputations, and I have tried to understand it, and to justify this request from an infant industry for exceptional treatment. I think there was some justification for treating it exceptionally when it was in the very infantile stage, but I think that that stage is passing away, and, with the best will in the world, I have not been able to convince myself that it is justifiable for the Government to continue this policy, as they clearly do intend to continue it for some years more. They have said they intend to pursue this policy for five years more. I cannot for the life of me see the justification. Probably before I was able to be present here this afternoon, the facts have been stated as to why the industry claimed this exceptional treatment, and why it was they were not able to make a profit last year, and are therefore asking for bigger rebates this year. The arguments of those interested in the factories, I remember, were, first, that the workers were not yet really accustomed to the machinery, and could not get the best out of the plant; and, secondly, with regard to one of the factories, at any rate, the management had not been satisfactory. They brought over, I believe, a Frenchman or a Belgian, to show them how to do it, and he had not got on well with the workmen, and so on, and, what otherwise might have been a profit, had been converted into a loss. Those two arguments do not go very far with me. If those responsible were so foolish, from a business point of view, as to bring over a manager who did not understand how to get on with the workers, instead of sending an Englishman to learn the business over there so as to be able to handle the work here, it did not presage well for the future management, and I was led to believe that the machinery was of so complicated a nature, that with a full season's experience and more, they were not able to get workers sufficiently accustomed to it.
The arguments, however, which make me come down very violently against the Government's proposal are not the ones
I have mentioned. They are these: I do not believe that beet-sugar production will ever pay against cane-sugar production, without special subsidies, unless it be able to depend on a very favourable situation, which it can never have in this country. I do not believe there is an instance of a really successful beet-sugar production unless, for instance, it can depend on exceptionally cheap labour. I do not believe there is a single instance in Europe where beet sugar is being produced to compete with cane sugar on open and fair terms, unless it be in a special position for getting cheap labour. I believe that in the Western part of Europe production depends wholly on cheap labour, which comes forward to do the winter work in connection with the sugar industry, and that in Belgium and other countries there are workers and their families ekeing out an extraordinarily small livelihood from small holdings, who are accustomed to work in sugar factories at wages an Englishman would never look at, and never could be asked to take. Therefore, I do not believe this industry can ever be established on a non-subsidised basis. This Committee knows that it requires great discipline on the part of the farmers to make the industry go properly. This is not an easy crop to get out of the ground when the season is dry, and, therefore, every farmer will wait till the land is in a state of wetness to enable the crop to be raised easily, and the factory will be flooded with products at one period which suits the farmer. It is going to be an entirely difficult thing, with the tendency of English farmers to manage their own industry as best suits themselves, to get that evenness of deliveries throughout the winter season which has been ingrained in foreign farmers as a necessity, but which would be extremely difficult for English farmers to learn. It is not possible for those who support the Government proposal to point to beet sugar being a success anywhere where labour conditions are such as they are bound to be, and we wish to see in this country. Therefore, I am perfectly certain the industry will never be able to act in this country on a non-subsidised basis. If this is to be considered at all by this Committee, let it be considered frankly as a permanent matter of artificial subsidies, and do not let us have any camouflage about it being a temporary thing for three or four years,
while the industry is getting on its legs. If it could really be proved that the industry in a few years could get going without help, it would be a different matter, but as I am certain this industry could never get on to a permanent non-subsidised basis, I am going to support the Amendment.

6.0 P.M.

Mr. A. HOPKINSON: I should like to endorse what the right hon. Gentleman the Member for Camborne (Mr. Aoland) has said. I think every Member of this Committee who served in France or Germany will be able to see the situation, and be able to give evidence in this matter. It is perfectly clear that at certain times of the year the cultivation of beet sugar requires labour conditions such as none of us in this Committee would like to see introduced into this country. It requires child labour on a very large scale, and it involves very long hours of work under very difficult conditions. I cannot, myself, see how, in a country like this, we are ever to compete against the cheap labour in Northern France and Belgium, and particularly that which comes from Poland and Russia into the German beet-sugar districts. In fact, I have had this whole matter out with those interested in this great industry—I am not referring to the hon. and gallant Member for Stratford (Mr. L. Lyle). The gentleman in question is one of the largest persons concerned in this trade, and he told me that the whole trouble in regard to the beet sugar industry in this country is that labour conditions would have to be accepted which no Englishman would accept for any long period. The hon. and gallant Member for Leith did not go quite far enough in what he said. He pointed out—I think quite rightly—that any benefit which was going to accrue, apart from the benefit of wages, from this policy of the Government would accrue to Dutchmen and other foreigners. He also pointed out that this was evidently an attempt to bolster up a really bad investment on the part of the Government. He pointed out—also quite justly—that this was not the first; but what, I think, he failed to point out was the failure of this policy: that in another notorious case, the case of the manufacture of dyes in this country, we had exactly the same typical form of legislation we are getting in this
particular Clause. We passed the Dyestuffs (Import Regulations) Act, and when it became perfectly obvious that the taxpayers' money had been lost owing to the reckless gambling of those who put it into British dyes, then, in order to try to "boost" up that investment, and in order that the Chancellor of the Exchequer, who was then President of the Board of Trade, might say that the taxpayers' money had not been lost, and that we should be able to get out of this company with a 50 per cent. instead of a 75 per cent. loss, he came down to this House and introduced legislation just like this Clause in order to bolster up an industry in which he had wasted the taxpayers' money.
Everybody in commercial circles knows perfectly well that it is quite impossible to realise the Government investments in the beet sugar factories, and that it is highly probable, as the hon. and gallant Member for Leith says, that we shall have to fulfil the guarantees which have been recklessly given over a long period. Now he comes, just as in the case of the Dyes Bill, trying to bolster up a company which is really on the rocks already, and to try to prove to the taxpayers that their money has not been squandered. When is this going to end? Are we to have legislation to prevent the farmers in this country from buying their phosphates from anywhere except Nauru? Are we to be told that nobody is to buy artificial silk except from that other magnificent company, the British Cellulose Company? Is a single farthing of the taxpayers' money which has been squandered in these reckless gambles to be returned to them as a result of the taxation of the whole population? The right hon. Gentleman knows perfectly well, and so does every Member of this House who is engaged in commercial concerns, that it is utterly impossible to realise our investments in cellulose, in British dyes, or in British beet sugar at the present time. I do think it would become the right hon. Gentleman if he got up and admitted once for all that he has lost our money for us, and not to attempt by excessive taxation in other directions to "boost up" the shares of industries in which he has lost that money.

Lieut.-Colonel ROYDS: The last speaker addressed the House as if this
proposal to remit the Excise Duty on sugar-beet had only reference to the two companies in question at the present time. It is a very broad proposal, and one in the highest interests of agriculture, and has as its main object the increasing of the arable land in this country. Did not the increased production of wheat and oats, which was the object of the Agriculture Act, receive the support of three-quarters of the House of Commons? Of course it did. We are quite forgetting what happened in the War and after. Most of us then came to the conclusion that it was in the highest interests of this country to encourage the production of wheat, and to keep land which was under the plough under the plough, and to get more under the plough if we could procure it. We are starting to grow sugar beet, and it will surely have some effect in this country, in the direction I have indicated, if it is as successful, as I believe it will be, as it is in Germany. Germany attributes much of her success in agriculture and in increasing her cereal crops as do the other European countries from growing the sugar beet. That is the main object of this proposal. The right hon. Gentleman talked about labour. It is not only labour in factories. It is labour on the land that will be employed, labour which growing beet occasions, and it will be of the greatest advantage to the small people whom we have set up since the War. They have a, ready market with cash sales for a root crop, and they look forward to better cereal crops afterwards. I only rise to remind the Committee that this has nothing to do with those two particular factories. This is done to fulfil the intention and policy of the Government as expressed also in this House to increase the producttion of wheat throughout the country.

Sir COURTENAY WARNER: I think somebody at this time, some supporter of the Government., ought to get up and make a protest. Last night I came into the House with the intention of supporting the Government, but a Protectionist speech by the Solicitor-General sent me out of the House. This afternoon I come here and I hear what is advocated by the Chancellor of the Exchequer on the ground of the protection of a small industry. I will not go into details, but it is really an absolute Protectionist proposition. I agree with the right hon. Gentleman the Member for Camborne (Mr. Acland), who stated the agricultural point of view. We have heard other agricultural points of view. I have seen attempts to grow sugar in my neighbourhood in Suffolk, where it was attempted to put down a factory a great many years ago. That factory is now being pulled down. The experiment has been tried over and over again. It is not a nascent industry which is being tried in this country. It has been tried for more than 20 or 30 years, and has always failed. I do not believe it will he any remedy for agriculture. I know cultivation of these crops necessitates cheap labour; not in the factories, but cheap labour on the farms, and that is what we do not want to see. If it is only going to resuscitate underfed and underpaid men in agriculture, it is not the sort of industry this country should support. I am against any sort of contribution from the Government to any industry, because I am still a believer in Free Trade.

Question put, "That those words be there inserted."

The Committee divided: Ayes, 80; Noes, 274.

Division No. 156.]
AYES.
[6.11 p.m.


Acland, Rt. Hon. Francis D.
Foot, Isaac
Holmes, I Stanley


Ammon, Charles George
Galbraith, Samuel
John, William (Rhondda, West)


Armitage, Robert
Ganzoni, Sir John
Kenworthy, Lieut.-Commander J. M.


Barton, Sir William (Oldham)
Gillis, William
Kiley, James Daniel


Bowerman, Rt. Hon. Charles W.
Graham, W. (Edinburgh, Central)
Lawson, John James


Bramsdon, Sir Thomas
Guest, J. (York, W. R., Hemsworth)
Lister, Sir R. Ashton


Brian), Frank
Hall, F. (York, W.R., Normanton)
Loseby, Captain C. E.


Brown, James (Ayr and Bute)
Hallas, Eldred
Lunn, William


Cairns, John
Halls, Walter
Lyle-Samuel, Alexander


Carter, W. (Nottingham, Mansfield)
Harmsworth, Hon. E. C. (Kent)
Maclean, Nell (Glasgow, Govan)


Cowan, D. M. (Scottish Universities)
Hartshorn, Vernon
Murray, Dr. D. (Inverness & Ross)


Davies, A. (Lancaster, Clitheroe)
Hayday, Arthur
Murray, Hon. Gideon (St. Rollox)


Davies, Rhys John (Westhoughton)
Hayward, Evan
Murray, John (Leeds, West)


Davies, Sir William H. (Bristol, S.)
Henderson, Rt. Hon. A. (Widnes)
Myers, Thomas


Dawson, Sir Philip
Henderson, Lt.-Col. V. L. (Tradeston)
Nall, Major Joseph


Doyle, N. Grattan
Hodge, Rt. Hon. John
Newbould, Alfred Ernest


Finney, Samuel
Hogge, James Myles
O'Grady, Captain James


Ormsby-Gore, Hon. William
Shaw, Thomas (Preston)
Waterson, A. E.


Parkinson, John Allen (Wigan)
Shaw, William T. (Forfar)
Watts-Morgan, Lieut.-Col. D.


Poison, Sir Thomas A.
Short, Alfred (Wednesbury)
White, Charles F. (Derby, Western)


Rae, Sir Henry N.
Smith, Sir Harold (Warrington)
Williams, Aneurlin (Durham, Consett)


Raffan, Peter Wilson
Spoor, B. G.
Williams, Col. P (Middlesbrough, E.)


Rees, Capt. J. Tudor- (Barnstaple)
Sueter, Rear-Admiral Murray Fraser
Wintringham, Margaret


Rendall, Athelstan
Sutton, John Edward
Wood, Major M. M. (Aberdeen, C.)


Robertson, John
Tillett, Benjamin



Rodger, A. K.
Wallace, J.
TELLERS FOR THE AYES.—


Rose, Frank H.
Walsh. Stephen (Lancaster, Ince)
Mr. Hannon and Mr. Leonard Lyle.


Shaw, Hon. Alex. (Kilmarnock)
Warner, Sir T. Courtenay T.



NOES.


Adamson, Rt. Hon. William
Edwards, Allen C. (East Ham, S.)
Lorden, John William


Agg-Gardner, Sir James Tynte
Elveden, Viscount
Lowther, Major C. (Cumberland, N.)


Amery, Rt. Hon. Leopold C. M. S.
Evans, Ernest
M'Donald, Dr. Bauverie F. P.


Archer-Shee, Lieut.-Colonel Martin
Eyres-Monsell, Com. Bolton M.
Mackinder, Sir H. J. (Camlachie)


Armstrong, Henry Bruce
Falcon, Captain Michael
McLaren, Robert (Lanark, Northern)


Ashley, Colonel Wilfrid W.
Falle, Major Sir Bertram Godfrey
Mc-Lean, Lieut.-Col. Charles W. W.


Atkey, A. R.
Farquharson, Major A. C.
Macleod, J. Mackintosh


Baird, Sir John Lawrence
Fell, Sir Arthur
McNeill, Ronald (Kent, Canterbury)


Balfour, George (Hampstead)
FitzRoy, Captain Hon. Edward A.
Macpherson, Rt. Hon. James I.


Banbury, Rt. Hon. Sir Frederick G.
Ford, Patrick Johnston
Macquisten, F. A.


Banner, Sir John S. Harmood-
Foreman, Sir Henry
Magnus, Sir Philip


Barlow, Sir Montague
Forestier-Walker, L.
Mailalleu, Frederick William


Barnes, Rt. Hon. G. (Glas., Gorbals)
Forrest, Walter
Marriott, John Arthur Ransome


Barnett, Major Richard W.
Foxcroft, Captain Charles Talbot
Middlebrook, Sir William


Barnston, Major Harry
Fraser, Major Sir Keith
Mildmay, Colonel Rt. Hon. F. S.


Barrand, A. R.
Frece, Sir Walter de
Molson, Major John Elsdale


Bartley-Denniss, Sir Edmund Robert
Fremantle, Lieut.-Colonel Francis E.
Moreing, Captain Algernon H.


Beauchamp, Sir Edward
Gardner, Ernest
Morrison, Hugh


Beckett, Hon. Gervase
Gee, Captain Robert
Morrison-Bell, Major A. C.


Bell, Lieut.-Col. W. C. H. (Devizes)
Gibbs, Colonel George Abraham
Munro, Rt. Hon. Robert


Bellairs, Commander Canyon W.
Gilmour, Lieut.-Colonel Sir John
Murchison, C. K.


Benn, Capt. Sir I. H., Bart.(Genw'h)
Glanville, Harold James
Murray, Rt. Hon. C. D. (Edinburgh)


Bennett, Sir Thomas Jewell
Glyn, Major Ralph
Neal, Arthur


Betterton, Henry B.
Goff, Sir R. Park
Newman, Colonel J. R. P. (Finchley)


Bigland, Alfred
Goulding, Rt. Hon. Sir Edward A.
Newton, Sir Percy Wilson


Birchall, J. Dearman
Green, Joseph F. (Leicester, W.)
Newton, Sir D. G. C. (Cambridge)


Bird, Sir William B. M. (Chichester)
Greene, Lt.-Col. Sir W. (Hack'y. N.)
Nicholl, Commander Sir Edward


Blair, Sir Reginald
Greer, Sir Harry
Nicholson, Brig.-Gen. J. (Westminster)


Blake, Sir Francis Douglas
Greig, Colonel Sir James William
Nicholson, William G. (Petersfield)


Borwick, Major G. O.
Guest, Capt. Rt. Hon. Frederick E.
Norris, Colonel Sir Henry G.


Boscawen, Rt. Hon. Sir A. Griffith-
Guinness, Lieut.-Col. Hon. W. E.
Oman, Sir Charles William C.


Bowles, Colonel H. F.
Gwynne, Rupert S.
Parker, James


Bowyer, Captain G. W. E.
Hacking, Captain Douglas H.
Parry, Lieut.-Colonel Thomas Henry


Brassey, H. L. C.
Hamilton, Sir George C.
Pearce, Sir William


Breese, Major Charles E.
Harmsworth, C. B. (Bedford, Luton)
Pease, Rt. Hon. Herbert Pike


Bridgeman, Rt. Hon. William Clive
Harris, Sir Henry Percy
Peel, Col. Hn. S. (Oxbridge, Mddx.)


Briggs, Harold
Hennessy, Major J. R. G.
Pennefather, De Fonblanque


Broad, Thomas Tucker
Herbert Dennis (Hertford, Watford)
Percy, Lord Eustace (Hastings)


Brown, Brig.-Gen. H. C. (Newbury)
Finder, Lieut.-Colonel Frank
Perkins, Walter Frank


Buckley, Lieut.-Colonel A.
Hills, Major John Waller
Perring, William George


Bull, Rt. Hon. Sir William James
Hinds, John
Philipps, Gen. Sir I. (Southampton)


Burdon, Colonel Rowland
Hoare, Lieut.-Colonel Sir S. J. G.
Philipps, Sir Owen C. (Chester, City)


Burgoyne, Lt.-Col. Sir Alan Hughes
Hohler, Gerald Fitzroy
Pickering, Colonel Emil W.


Burn, Col. C. R. (Devon, Torquay)
Hood, Sir Joseph
Pilditch, Sir Philip


Butcher, Sir John George
Hope, Sir H.(Stirling & Cl'ckm'nn,W.)
Pollock, Rt. Hon. Sir Ernest Murray


Campion, Lieut.-Colonel W. R.
Hope, Lt.-Col. Sir J. A. (Midlothian)
Pownall, Lieut.-Colonel Assheton


Carr, W. Theodore
Hope, J. D. (Berwick & Haddington)
Pretyman, Rt. Hon. Ernest G.


Carter, R. A. D. (Man., Withington)
Hopkins, John W. W.
Purchase, H. G.


Chamberlain, Rt. Hn. J, (Birm, W.)
Horne, Sir R. S. (Glasgow, Hillhead)
Raeburn, Sir William H.


Cheyne, Sir William Watson
Hunter, General Sir A. (Lancaster)
Rankin, Captain James Stuart


Child, Brigadier-General Sir Hill
Hurst, Lieut.-Colonel Gerald B.
Ratcliffe, Henry Butler


Churchman, Sir Arthur
Inskip, Thomas Walker H.
Raw, Lieutenant-Colonel Dr. N.


Clay, Lieut.-Colonel H. H. Spender
Jackson, Lieut.-Colonel Hon. F. S.
Rawlinson, John Frederick Peel


Clough, Sir Robert
James, Lieut.-Colonel Hon. Cuthbert
Reid, D. D.


Clynes, Rt. Hon. John R.
Jephcott. A. R.
Remer, J. R.


Coats, Sir Stuart
Jesson, C.
Remnant, Sir James


Cobb, Sir Cyril
Jones, Sir Evan (Pembroke)
Richardson, Sir Alex. (Gravesend)


Cockerill, Brigadier-General G. K.
Jones, G. W. H. (Stoke Newington)
Richardson, Lt.-Col. Sir P. (Chertsey)


Cohen, Major J. Brunel
Jones, Henry Haydn (Merioneth)
Richardson, R. (Houghton-le-Spring)


Colfox, Major Wm. Phillips
Kelley, Major Fred (Rotherham)
Roberts, Rt. Hon. G. H. (Norwich)


Conway, Sir W. Martin
Kidd, James
Robinson, S. (Brecon and Radnor)


Cope, Major William
King, Captain Henry Douglas
Robinson, Sir T. (Lancs., Stretford)


Crack, Rt. Hon. Sir Henry
Lambert, Rt. Hon. George
Rothschild, Lionel de


Curzon, Captain Viscount
Lane-Fox, G. R.
Roundell, Colonel R. F.


Dalziel, Sir D. (Lambeth, Brixton)
Larmor, Sir Joseph
Royce, William Stapleton


Davidson. J. C. C. (Hemel Hempstead)
Law, Alfred J. (Rochdale)
Royds, Lieut.-Colonel Edmund


Davies, Thomas (Cirencester)
Leigh, Sir John (Clapham)
Rutherford, Colonel Sir J. (Darwen)


Davison, Sir W. H. (Kensington, S.)
Lewis, Rt. Hon. J. H. (Univ., Wales)
Samuel, A. M. (Surrey, Farnham)


Dean, Commander P. T.
Lindsay, William Arthur
Samuel, Samuel (W'dsworth, Putney)


Dewhurst, Lieut.-Commander Harry
Lloyd, George Butler
Sanders, Colonel Sir Robert Arthur


Du Pre, Colonel William Baring
Locker-Lampson, G. (Wood Green)
Sassoon, Sir Philip Albert Gustave D.


Edge, Captain Sir William
Locker-Lampson, Com. O. (H'tingd'n)
Scott, A.M. (Glasgow, Bridgeton)




Scott, Sir Leslie (Liverp'l, Exchange)
Townley, Maximillan G.
Wilson, Col. M. J. (Richmond)


Seddon, J. A.
Tryon, Major George Clement
Windsor, Viscount


Seely, Major-General Rt. Hon. John
Turton, Edmund Russborough
Winfrey, Sir Richard


Sharman-Crawford, Robert G.
Waddington, R.
Winterton, Earl


Simm, M. T.
Walters, Rt. Hon. Sir John Tudor
Wise, Frederick


Smith, Sir Allan M. (Croydon, South)
Walton, J. (York, W, R., Don Valley)
Wolmer, Viscount


Sprot, Colonel Sir Alexander
Ward-Jackson, Major C. L.
Wood, Hon. Edward F. L. (Ripon)


Stanley, Major Hon. G. (Preston)
Ward, Col. J. (Stoke-upon-Trent)
Wood, Sir J. (Stalybridge & Hyde)


Stanton, Charles Butt
Ward, Col. L. (Kingston-upon-Hull)
Wood, Major Sir S. Hill (High Peak)


Starkey, Captain John Ralph
Waring, Major Walter
Woolcock, William James U.


Steel, Major S. Strang
Wedgwood, Colonel Josiah C.
Worthington-Evans, Rt. Hon. Sir L.


Stephenson, Lieut.-Colonel H. K.
Weston, Colonel John Wakefield
Yate, Colonel Sir Charles Edward


Stewart, Gershom
Wheler, Col. Granville C. H.
Young, Sir Frederick W. (Swindon)


Sugden, W. H.
White, Col. G. D. (Southport)
Young, Robert (Lancaster, Newton)


Sutherland, Sir William
Wignall, James
Young, W. (Perth & Kinross, Perth)


Swan, J. E.
Williams, C. (Tavlstock)
Younger, Sir George


Taylor, J.
Willoughby, Lieut.-Col. Hon. Claud



Terrell, George (Wilts, Chippenham)
Wills, Lt,-Col. Sir Gilbert Alan H.
TELLERS FOR THE NOES.—


Thomson, F. C. (Aberdeen, South)
Wilson, Field-Marshal Sir Henry
Colonel Leslie Wilson and Mr.


Thomson, Sir W. Mitchell (Maryhill)
Wilson, Rt. Hon. J. W. (Stourbridge)
Dudley Ward.


Tickler, Thomas George
Wilson, Lt.-Col. Sir M. (Bethnal Gn.)

Mr. HANNON: I beg to move, in Subsection (2) after the word "paid" ["upon which no duty has been paid"] to insert the words:
and also, with a view in the case of non-dutiable sugar and molasses entering a refinery working in bond, that no duty shall be paid on delivery on such non-dutiable sugar or its equivalent.
I am moving this Amendment in order to help the Chancellor of the Exchequer.

Sir R. HORNE: Perhaps the hon. Member will allow me to point out that the object of this Amendment is already provided for in Sub-section (3) of the Clause.

Mr. N. MACLEAN: I have an Amendment to move in the shape of a new Clause to repeal the whole of the Sugar Duty take this opportunity of rising now to intimate that when the new Clauses are taken I wish to state my reasons why the Sugar Duty should be repealed.

Mr. HANNON: After what the Chancellor of the Exchequer has just stated I ask leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

Question put, "That the Clause stand part of the Bill."

The Committee divided: Ayes, 267; Noes, 88.

Division No. 157.]
AYES.
[6.25 p.m.


Agg-Gardner, Sir James Tynte
Brown. Brig.-Gen. H. C. (Newbury)
Falcon, Captain Michael


Amery, Rt. Hon. Leopold C. M. S.
Buckley. Lieut.-Colonel A.
Falle, Major Sir Bertram Godfray


Archer-Shee, Lieut.-Colonel Martin
Bull, Rt. Hon. Sir William James
Farquharson, Major A. C.


Armstrong, Henry Bruce
Burdon, Colonel Rowland
Fell, Sir Arthur


Ashley, Colonel Wilfrid W.
Burgoyne, Lt.-Col. Sir Alan Hughes
FitzRoy, Captain Hon. Edward A.


Alkey, A. R.
Burn, Col. C. R. (Devon, Torquay)
Ford, Patrick Johnston


Baird, Sir John Lawrence
Butcher, Sir John George
Foreman, Sir Henry


Balfour, George (Hampstead)
Carr, W. Theodore
Forestier-Walker, L.


Banbury, Rt. Hon. Sir Frederick G.
Carter, R. A. D. (Man., Withington)
Forrest, Walter


Banner, Sir John S. Harmood-
Cecil, Rt. Hon. Sir Evelyn (Aston)
Foxcroft, Captain Charles Talbot


Barlow, Sir Montague
Chamberlain, Rt. Hon. J. A.(Birm.,W.)
Fraser, Major Sir Keith


Barnes, Rt. Hon. G. (Glas., Gorbals)
Cheyne, Sir William Watson
Frece, Sir Walter de


Barnett, Major Richard W.
Child, Brigadier-General Sir Hill
Fremantle, Lieut.-Colonel Francis E.


Barnston, Major Harry
Churchman, Sir Arthur
Ganzoni, Sir John


Barrand, A. R.
Clay, Lieut.-Colonel H. H. Spender
Gardner, Ernest


Barrie, Sir Charles Coupar (Banff)
Clough, Sir Robert
Gee, Captain Robert


Bartley-Denniss, Sir Edmund Robert
Coats, Sir Stuart
Gibbs, Colonel George Abraham


Beauchamp, Sir Eaward
Cobb, Sir Cyril
Gilmour, Lieut.-Colonel Sir John


Beckett, Hon. Gervase
Cockerill, Brigadier-General G. K.
Glyn, Major Ralph


Bell, Lieut.-Col. W. C. H. (Devizes)
Cohen, Major J. Brunel
Goff. Sir R. Park


Bellairs, Commander Canyon W.
Colfox, Major Win, Phillips
Goulding, Rt. Hon. Sir Edward A.


Benn. Capt. Sir I. Bart. (Gr'nw'h)
Conway, Sir W. Martin
Green, Joseph F. (Leicester, W.)


Bennett, Sir Thomas Jewell
Crack, Rt. Hon. Sir Henry
Greene, Lt.-Col. Sir W. (Hack'y, N.)


Betterton, Henry B.
Curzon, Captain Viscount
Greer, Sir Harry


Bigland, Alfred
Dalziel, Sir D. (Lambeth, Brixton)
Greig, Colonel Sir James William


Birchall, J. Dearman
Davidson, J. C. C. (Hemel Hempstead)
Guest, Capt. Rt. Hon. Frederick E.


Bird, Sir William B. M. (Chichester)
Davidson, Major-General Sir J. H.
Guinness, Lieut.-Col. Hon. W. E.


Blair, Sir Reginald
Davies, Thomas (Cirencester)
Hacking, Captain Douglas H.


Blake, Sir Francis Douglas
Davison, Sir W. H. (Kensington, S.)
Hall, Rr-Admi Sir W. (Llv'p'1,W. D'by)


Barwick, Major G. O
Dawson, Sir Philip
Hamilton, Sir George C.


Boscawen, Rt. Hon. Sir A. Griffith-
Dewhurst, Lieut.-Commander Harry
Harmsworth, C. B. (Bedford, Luton)


Bowles. Colonel H. F.
Doyle, N. Grattan
Harmsworth, Hon. E. C. (Kent)


Bowyer, Captain G. W. E.
Du Pre, Colonel William Baring
Harris, Sir Henry Percy


Braseey, H. L. C
Edge, Captain Sir William
Hennessy, Major.J. R. G.


Breese, Major Charles E.
Elveden, Viscount
Herbert, Dennis (Hertford, Watford)


Bridgeman, Rt. Hon. William Clive
Evans, Ernest
Hilder, Lieut.-Colonel Frank


Briggs. Harold
Eyres-Monsell, Corn. Bolton M.
Hills, Major John Waller


Hoare, Lieut.-Colonel Sir S. J. G.
Nicholson, Brig.-Gen. J. (Westminster)
Sprot, Colonel Sir Alexander


Hohler, Gerald Fitzroy
Nicholson, Reginald (Doncaster)
Stanley, Major Hon. G. (Preston)


Hood, Sir Joseph
Nicholson, William G. (Petersfield)
Stanton, Charles Butt


Hope, Sir H. (Stirling & C'ckm'nn'n,W.)
Norris, Colonel Sir Henry G.
Starkey, Captain John Ralph


Hope, Lt.-Col. Sir J. A. (Midlothian)
Oman, Sir Charles William C.
Steel, Major S. Strang


Hope, J. D. (Berwick & Haddington)
Parker, James
Stephenson, Lieut.-Colonel H. K.


Hopkins, John W. W.
Parry, Lieut.-Colonel Thomas Henry
Stewart, Gershom


Horne, Sir R. S. (Glasgow, Hillhead)
Pearce, Sir William
Sturrock, J. Leng


Hunter, General Sir A. (Lancaster)
Pease, Rt. Hon. Herbert Pike
Sueter, Rear-Admiral Murray Fraser


Hurst, Lieut.-Colonel Gerald B.
Peel, Col. Hn. S. (Uxbridge, Mddx.)
Sugden, W. H.


Inskip, Thomas Walker H.
Pennefather, De Fonblanque
Sutherland, Sir William


Jackson, Lieut.-Colonel Hon. F. S.
Percy, Lord Eustace (Hastings)
Taylor, J.


James, Lieut.-Colonel Hon. Cuthbert
Perkins, Walter Frank
Terrell, George (Wilts, Chippenham)


Jephcott, A. R.
Perring, William George
Thomson, F. C. (Aberdeen, South)


Jesson, C.
Philipps, Gen. Sir I. (Southampton)
Thomson, Sir W. Mitchell (Maryhill)


Jones, Sir Evan (Pembroke)
Philipps, Sir Owen C. (Chester, City)
Tickler, Thomas George


Jones, G. W. H. (Stoke Newington)
Pickering, Colonel Emil W.
Townley, Maximilian G.


Kelley, Major Fred (Rotherham)
Pilditch, Sir Philip
Tryon, Major George Clement


Kidd, James
Pollock, Rt. Hon. Sir Ernest Murray
Turton, Edmund Russborough


King, Captain Henry Douglas
Polson, Sir Thomas A.
Waddington, R.


Lane-Fox, G. R.
Pownall, Lieut.-Colonel Assheton
Walters, Rt. Hon. Sir John Tudor


Larmor, Sir Joseph
Pretyman, Rt. Hon. Ernest G.
Walton, J. (York, W. R., Don Valley)


Law, Alfred J. (Rochdale)
Purchase, H. G.
Ward-Jackson, Major C. L.


Lewis, Rt. Hon. J. H. (Univ., Wales)
Raeburn, Sir William H.
Ward, Col. J. (Stoke-upon-Trent)


Lister, Sir R. Ashton
Randies, Sir John Scurrah
Ward, Col. L. (Kingston-upon-Hull)


Lloyd, George Butler
Rankin, Captain James Stuart
Waring, Major Walter


Locker-Lampoon, G. (Wood Green)
Ratcliffe, Henry Butler
Warner, Sir T. Courtenay T.


Lorden, John William
Raw, Lieutenant-Colonel Dr. N.
Weston, Colonel John Wakefield


Lowther, Major C. (Cumberland, N.)
Rawlinson, John Frederick Peel
Wheler, Col. Granville C. H.


M'Donald, Dr. Bouverie F. P.
Reid, D. D.
White, Col. G. D. (Southport)


Mackinder, Sir H. J. (Camlachie)
Ramer, J. R.
Williams, C. (Tavistock)


McLaren, Robert (Lanark, Northern)
Remnant, Sir James
Willoughby, Lieut.-Col. Hon. Claud


M'Lean, Lieut.-Col. Charles W. W.
Richardson, Sir Alex. (Gravesend)
Wills, Lt.-Col. Sir Gilbert Alan H.


Macleod, J. Mackintosh
Richardson, Lt.-Col. Sir P. (Chertsey)
Wilson, Field-Marshal Sir Henry


McNeill, Ronald (Kent, Canterbury)
Roberts, Rt. Hon. G. H. (Norwich)
Wilson, Lt-Col. Sir M. (Bethnal Gn.)


Macpherson, Rt. Hon. James I.
Rothschild, Lionel de
Windsor, Viscount


Macquisten, F. A.
Roundell, Colonel R. F.
Winfrey, Sir Richard


Magnus, Sir Philip
Royds, Lieut.-Colonel Edmund
Winterton, Earl


Marriott, John Arthur Ransome
Rutherford, Colonel Sir J. (Darwen)
Wise, Frederick


Middlebrook, Sir William
Rutherford, Sir W. W. (Edge Hill)
Wolmer, Viscount


Mildmay, Colonel Rt. Hon. F. B.
Samuel, A. M. (Surrey, Farnham)
Wood, Hon. Edward F. L. (Ripon)


Molson, Major John Elsdale
Samuel, Samuel (W'dsworth, Putney)
Wood, Sir J. (Stalybridge & Hyde)


Moreing, Captain Algernon H.
Sanders, Colonel Sir Robert Arthur
Wood, Major Sir S. Hill (High Peak)


Morrison, Hugh
Sassoon, Sir Philip Albert Gustave D.
Woolcock, William James U.


Morrison-Bell, Major A. C.
Scott, A. M. (Glasgow, Bridgeton)
Worthington-Evans, Rt. Hon. Sir L.


Munro, Rt. Hon. Robert
Scott, Sir Samuel (St. Marylebone)
Yate, Colonel Sir Charles Edward


Murchison, C. K.
Seddon, J. A.
Young, Sir Frederick W. (Swinden)


Murray, Rt. Hon. C. D. (Edinburgh)
Seely, Major-General Rt. Hon. John
Young, W. (Perth & Kinross, Perth)


Neal, Arthur
Shaw, William T. (Forfar)
Younger, Sir George


Newman, Colonel J. R. P. (Finchley)
Shortt, Rt. Hon. E. (N'eastie-on-T.)



Newson, Sir Percy Wilson
Simm, M. T.
TELLERS FOR THE AYES.—


Newton, Sir D. G. C. (Cambridge)
Smith, Sir Allan M. (Croydon, South)
Colonel Leslie Wilson and Mr.


Nicholl, Commander Sir Edward
Smith, Sir Harold (Warrington)
Dudley Ward.


NOES.


Acland, Rt. Hon. Francis D.
Halls, Walter
Rae, Sir Henry N.


Adamson, Rt. Hon. William
Hannon, Patrick Joseph Henry
Rattan, Peter Wilson


Ammon, Charles George
Hartshorn, Vernon
Rees, Capt. J. Tudor (Barnstaple)


Armitage, Robert
Hayday, Arthur
Rendall, Athelstan


Asquith, Rt. Hon. Herbert Henry
Hayward, Evan
Richardson, R. (Houghton-le-Spring)


Barton, Sir William (Oldham)
Henderson, Rt. Hon. A. (Wldnes)
Robertson, John


Benn, Captain Wedgwood (Leith)
Henderson, Lt-Col. V. L. (Tradeston)
Robinson, S. (Brecon and Radnor)


Bentinck, Lord Henry Cavendish-
Hinds, John
Rose, Frank H.


Bowerman, Rt. Hon. Charles W.
Hodge, Rt. Hon. John
Shaw, Thomas (Preston)


Bramsdon, Sir Thomas
Hogge, James Myles
Short, Alfred (Wednesbury)


Briant, Frank
Holmes, J. Stanley
Spoor, B. G.


Broad, Thomas Tucker
Hopkinson, A. (Lancaster, Mossley)
Sutton, John Edward


Brown, James (Ayr and Bute)
John, William (Rhondda, West)
Swan. J. E.


Cairns, John
Jones, Henry Haydn (Merioneth)
Tillett, Benjamin


Carter, W. (Nottingham, Mansfield)
Kenworthy, Lieut.-Commander J. M.
Walsh, Stephen (Lancaster, Ince)


Cecil, Rt. Hon. Lord R. (Hitchin)
Kiley, James Daniel
Waterson, A. E.


Clynes, Rt. Hon. John R.
Lawson, John James
Watts-Morgan, Lieut.-Col. D.


Cowan, D. M. (Scottish Universities)
Lunn, William
Wedgwood, Colonel Josiah C.


Davies, A. (Lancaster, Ciltheroe)
Lyle, C. E. Leonard
White, Charles F. (Derby, Western)


Davies, Rhys John (Westhoughton)
Lyle-Samuel, Alexander
Wignall, James


Davies, Sir William H. (Bristol, S.)
Macdonald, Rt. Hon. John Murray
Williams, Aneurin (Durham, Consett)


Finney, Samuel
Maclean, Nell (Glasgow, Govan)
Williams, Col. P. (Middlesbrough, E.)


Foot, Isaac
Maclean, Rt. Hn. Sir D. (Midlothian)
Wilson, Rt. Hon. J. W. (Stourbridge)


Galbraith, Samuel
Mallalieu, Frederick William
Wintringham, Margaret


Gillis, William
Murray, Hon. A. C. (Aberdeen)
Wood, Major M. M. (Aberdeen, C.)


Glanville, Harold James
Murray, John (Leeds, West)
Young, Robert (Lancaster, Newton)


Graham, D. M. (Lanark, Hamilton)
Myers, Thomas



Graham, W. (Edinburgh, Central)
Nall, Major Joseph
TELLERS FOR THE NOES.—


Guest, J. (York, W. R., Hemsworth)
Newbould, Alfred Ernest
Sir Godfrey Collins and Dr.


Hall, F. (York, W. R., Normanton)
O'Grady, Captain James
Murray.


Hallas, Eldred
Parkinson, John Alien (Wigan)



Question put, and agreed to.

CLAUSE 7.—(Excise licence not required for sale of certain liquor.)

An excise licence shall not be required for the sale in Great Britain, whether wholesale or retail, of any liquor which, whether made on the licensed premises of a brewer of beer for sale or elsewhere, is found, on analysis of a sample thereof at any time, to be of an original gravity not exceeding one thousand and sixteen degrees and to contain not more than two per cent. of proof spirit.

Motion made, and Question proposed, "That the Clause stand part of the Bill."

Mr. ORMSBY-GORE: I beg to ask the Chancellor of the Exchequer what kind of liquor is referred to in this Clause, and why any change in the law is necessary in this respect?

Colonel P. WILLIAMS: I also wish to put a. question on this point. Some time ago a gentleman invented a process for the manufacture of a liquor, something like strong beer, from which he extracted the alcohol, selling the remainder as a temperance drink. I think it was a successful experiment, but, for some reason or other, the Excise authorities shut the business down and would not allow the liquor to be brewed in the brewery. Is this Clause intended to be a reversal of that policy?

Sir R. HORNE: The object of this Clause is to enable certain categories of liquor manufactured in a brewery to be sold on premises where no excise licence is required. It puts the liquor on exactly the same footing as similar liquor manufactured outside a brewery.

CLAUSE S.—(Exemption of certain compound articles from duty under 11 & 12 Geo. 5, c. 47.)

Where the Treasury after consultation with the Board of Trade are satisfied as respects any article which is liable to duty under the Safeguarding of Industries Act, 1921, by reason only that some ingredient or part of the article is liable to duty under that Act, that it is inexpedient, having regard to the nature of that ingredient or part and to the smallness of its value in comparison with the total value of the article, that duty should be charged under that Act, the Treasury may by order exempt that article from duty under the said Act.

Colonel WEDGWOOD: I beg to move to leave out the words
having regard to the nature of that ingredient or part and to the smallness of its value in comparison with the total value of the article.
This Clause enables the Treasury practically to reverse the Safeguarding of Industries Act. It gives them a power which we, naturally, on this side of the House want to see them exercise, but it only gives them that power in certain specified cases, and the object of my Amendment is to widen the powers of the Treasury and to enable them to reverse the Act of Parliament with greater facility and frequency than is possible at the present time. In moving this Amendment I am torn between the natural instinct of objecting to a Government Bill and a real desire to help the Government out of a hole. The Government, for good or ill, passed this Safeguarding of Industries Act. They have since found it to be in. convenient even in the privacy of their own Cabinet, and they are endeavouring by his Clause to get round some of the difficulties which they have made for themselves. It does not help them much, and I do not see why we should not give them slightly more ample powers than they are now seeking. Under the Clause they may only exempt articles coming into this country, such as dolls having eyes that are valuable. If the eyes are not of much value, then they cannot exempt the dolls. We would like them to be in a position to exempt anything they think fit, whatever the value of the dutiable part of it. Our proposal would facilitate matters enormously, and it would help the staff, which at present, in the small hours of the morning, are sitting with towels around their heads trying to solve the problem whether certain articles shall come in or be stopped. It would also give a help to the President of the Board of Trade. There he is he has to carry out an Act of Parliament which he does not like. He knows it is his duty to carry it out. This Clause would help him to get round some of his difficulties, and therefore I move the Amendment in order to enable him to do so all the more quickly.

Sir R. HORNE: It is a matter of very great regret that I am not able to take advantage of the very unusual 'offer of assistance just made by the hon. and gallant Member. I am bound, however, to refuse that help. I would like to point out, moreover, that his offer would not facilitate the operations of the Government Department. It would rather impose upon it a very much larger burden
of work than now falls to its lot, because the discretion which the hon. and gallant Member seeks to impose upon it is one of a most wide and far-reaching character. It would enable it, in fact, to tear up the Act of Parliament; it would enable the Treasury upon its mere ipse dixit to say that no compound article at all shall be charged the duty. The Safeguarding of Industries Act has been placed upon the Statute Book, and I am sure that the House of Commons would not be prepared to give such a power to abrogate it to any Government Department. When an Act has been passed, it is the duty of the Government Department to carry out the legislation and not to render nugatory any decisions of the House. I thank my hon. and gallant Friend for his generous offer in this matter, but I cannot ask the Committee to accept it.

Lord ROBERT CECIL: I very much regret the decision just announced. I look upon this Amendment as a very serious one. I think it would be an improvement on the Bill as it stands. The Bill gives power to exempt articles where only a small part is subject to the operation of the Safeguarding of Industries Act. Under the Clause as it stands, the Government must be satisfied that the part which is subject to the duty is only a small portion in comparison with the total value of the article. But that is a very vague expression, and I think this Amendment would only add to the doubt of the trader whether or not an article is likely to be taxed. It would add to the complexity of the matter, while it would not give the Government freedom to exempt any compound article, whether by reason of the smallness of the duty or by reason of the condition of the trade, or by reason of the size of the part which is subject to the duty. In none of these cases will they be allowed to exempt it under this Clause. The Clause proceeds on the principle that the wording of the Act has shown that some elasticity must be given unless you are to be landed in the most absurd results, as has happened in the case of dolls' eyes, of which we have heard so much recently.
This seems to prove that some dispensing power must be given to the Government, and that is the reason for this Clause. It would be very foolish to confine that dispensing power to the single
case of the smallness of the value of the dutiable part of the article. The immense probability is that this unfortunate piece of legislation, as I look upon it, when it comes to be worked further will disclose still other absurdities, which will make it very desirable to exempt all compound articles from the duty and not only those of which but a small part are subject to the duty. If you are going to give this dispensing power, it is far better to give it in as wide terms as possible, leaving it to the Department to carry out so much of the exemption as may seem desirable to it. This Amendment would make a material improvement in the Bill. There are other reasons which might be advanced for its adoption. The British Government have been represented at an international conference at Genoa. It has been there solemnly repeated, as it was constantly urged at previous economic conferences, that it is of the utmost importance to diminish to the greatest possible extent all barriers to trade between European countries. That has been laid down by every authority one can possibly conceive, strictly technical as well as political authorities. The Government now come down here and have an opportunity of showing, even in a slight degree, that they really do mean what they said at Genoa, and that they desire to diminish artificial barriers to trade between various countries. I venture to hope that this Committee will insist on accepting this Amendment, which seems to me to be a real improvement in the legislation and in some measure a fulfilment of the professions which the Government have made in the name of the House.

Mr. KILEY: Twelve months ago, when the Government introduced the Safeguarding of Industries Bill, they were told repeatedly that its administration was impossible. Despite all the advice tendered to them they persisted in putting it on the Statute Book, and now they have found that their arrangements are incapable of carrying it out. That is the reason why even at this late date, instead of bringing a Bill to amend the Act they have brought forward this proposal -in their Finance Bill to help them out of their difficulty. I have no doubt that one of the factors which led up to this Clause was the famous case of the dolls' eyes. In this Clause the Government take power to exempt dolls' eyes when they come in as part of the dolls, but there
are manufacturers in this country who make the dolls but import the eyes, and they have to pay the duty upon them. The Germans, however, can send in dolls with the eyes, and they are exempt. That has been the policy of the Board of Customs for some time, and in order to give it legal authority we are now asked to pass this Clause. I could keep the Committee going for a considerable period with illustrations of the impossibility of administering this Act as it is on the Statute Book at the present moment.
Again, why confine this to the Safeguarding of Industries Act? There are the Import Duties, in the case of which the same problem arises. A question was asked a few weeks back with regard to an electric lighting outfit upon which a trifling amount—something like 1s.—of duty had to be collected, and the apparatus had to be held up for weeks, at a cost of over £1, in order to enable that duty to be collected. There is no provision made in this Clause for such a case as that, because it comes under Import Duties and not under Safeguarding of Industries. If the Chancellor of the Exchequer wants, as I am sure he does, to assist the Customs, I suggest that it would be better to delete the reference to the Safeguarding of Industries Act and let it, apply to all duties. That would be of some use to the Customs, and, I take it, would be appreciated by their officials. Then there is another factor. Let it be realised that when this power is given there will be no control as to how the Customs will interpret or use it. An interesting question was asked some time ago by the hon. and gallant Member for Central Hull (Lieut.-Commander Ken-worthy) as to why a toy bagpipe, costing 2s., imported from France, was defined as a musical instrument subject to duty, whereas a mouth-organ imported from Germany, costing the same sum, came in free. The reply of the Financial Secretary to the Treasury was that mouth-organs were expressly exempted from the Customs Duty on musical instruments by a Treasury Order made under Section 5 of the Finance Act, 1915. This Order also covered all other musical instruments the value of which did not exceed 1s. Therefore, a toy bagpipe coming from France, and costing 2s., would not be exempted, but a mouth-organ, costing
exactly the same sum, would be exempted. What nonsense it is to proceed with legislation of this kind.
Perhaps I might give one other illustration. A well-known firm of pickle manufacturers imported glass bottles with their name embossed on the glass. The Customs officials said that the name of the country of origin must also be put on the bottles. The manufacturers said that that would not be right, because their pickles were not made in Holland but in Great Britain. That necessitated a meeting of His Majesty's Board of Customs, and, after a good deal of consideration, they decided that in such a case the bottles might come in despite the fact that they had an English name embossed upon them. All this shows the absurdity of this legislation, but., while the Chancellor of the Exchequer and the Government insist on its remaining on the Statute Book with all its foolishness, I do not think we can do better than make it as easy as possible for them to conduct their business. I would point out to the Chancellor of the Exchequer that it is no use his proceeding without taking ample powers, so that, for instance, a doll manufacturer who wants to import the eyes shall not be penalised in favour of the foreign exporter of the complete doll.

Dr. MURRAY: I think the Chancellor of the Exchequer has forgotten the Safe-guarding of Industries Act. His argument just now was on the assumption that the articles upon which the duty was to be levied are definitely stated in the Act, but the Board of Trade have, in the exercise of their discretion, introduced from 6,000 to 8,000 articles that were not named in the Act at all. I should much prefer the matter to be left in the hands of my right hon. Friend. He has a scientific staff at his disposal who could decide many of these cases. For instance, there is the question of gas mantles. The whole question whether a duty was to be levied on gas mantles depended upon whether certain fine chemicals, nitrate of cerium and nitrate of thorium, lost their identity when worked up into the mantles, and any duty would be levied upon that part of the mantle which was composed of oxide of cerium and oxide of thorium—it becomes oxide in the process of manufacture. The question that had to be determined was whether these substances,
after being combined, lost their identity altogether. I can illustrate what I mean by a political allusion. Did the Coalition Liberals, on the one hand, or the Coalition Unionists, on the other, lose their identity when they became merged in the Coalition? That is a question that has puzzled many people. I should not mind leaving it to the discretion of the scientific Department at the Treasury to decide a question of that sort, and that sort of question, having been before the various officials indirectly for some time, might help them to come to a decision as to whether these substances have lost their identity when they are made part of a gas mantle. My sole point is that the right hon. Gentleman is not taking more discretion than the Board of Trade have already. They have already the discretion to put thousands of articles into the Schedule without getting the direct consent of the House of Commons. Here we are not extending to the Treasury any more discretion in applying taxes than the House has already granted to the Board of Trade, and I would much prefer, and I think the House generally would prefer, that this discretion should be in the hands of the Treasury, which is a Department accustomed to decide questions of that sort, rather than of the Board of Trade. My right hon. Friend is just a little too modest in assuming that he could not do this hit of work better than the Board of Trade. Therefore, I support the Amendment.

Captain W. BENN: It is very hard to resist the temptation to take advantage of the rare opportunities that occur for pursuing the investigation of this fascinating Act of Parliament. This Clause in the Finance Bill, apparently, enlarges the powers which the Government already have to exempt various articles from the incidence of the duties imposed by this Act. I should like to ask the Chancellor of the Exchequer one or two questions with reference to that, and to the effect which the proposed Amendment of the Act—because this is in effect an Amendment of the Safeguarding of Industries Act—will have upon the Act itself and upon its somewhat complicated operations. Under Section I (4) of the Act, where an imported article consists of ingredients one or more of which is dutiable it may be freed from duty if such
ingredient or ingredients lose their identity, as my hon. Friend the Member for the Western Isles (Dr. Murray) has rightly stated. Is this power intended to assist the Government? Where the question of loss of identity is difficult to determine, does this give them power to decide the question? It says here that if an ingredient is liable to duty, then for certain reasons, although the articles becomes thereby liable—

Sir R. HORNE: This Clause does not deal with cases in which the identity of the ingredient is lost, but only with cases in which it is of very small value as compared with the total value of the article.

Captain BENN: Exactly. I think I am right in saying that, if the identity of the ingredient is held to be lost, the article is not dutiable. But here, even if the identity of the ingredient is not lost, the Government may for certain reasons waive the duty. The question I want to ask is, Are the Government intending to use this power for the purpose of assisting them in cases such as have arisen, when the Court could not decide whether the identity of the articles had been lost or not?

Sir R. HORNE: I do not follow the hon. and gallant Member.

Captain BENN: Let me make clear what I have in my mind. The gas mantle is a case in point.. I understand that there was great difficulty in deciding whether these dutiable ingredients had lost their identity, and I do not know now what is the position with regard to the gas mantle—whether is dutiable or not. In that case, is the Government intending to use the power conferred upon them by this Clause to relieve the gas mantle from the imposition of a duty which would otherwise tall upon it? That, I imagine, is the sort of case which the Government has in mind, and also the very absurd cases which are constantly arising, such as the one we had to-day at Question Time, in which a duty of 11d. was levied on some parcel and the Post Office charged 15s. for opening the parcel in order to ascertain whether it was dutiable or not. That, I imagine, is primarily the kind of case, but would this additional power enable the Government to settle the controversy in regard to gas mantles? That is a question which I should like the Chancellor of the Exchequer to answer.
Then there is another point. If hon. Members will look at the Clause they will find that it is not in the least confined to Part I of the Safeguarding of Industries Act. Part I of the Safeguarding of Industries Act imposes duties according to lists published in pursuance of Section 1 of the Act. Part II allows duties to be imposed by Orders which must he on the Table of the House of Commons. As snowing how fascinating the study of the subject can become, if hon. Members will look at Part II, Section 3, they will find that where an article is partly made in one country and partly in another, or where some of its ingredients are of one origin and some of another, it may escape the imposition of the duty under an Order made by the Board of Trade. Now these Orders are about to be made. Will this Clause enable the Government again to defeat the intention of Parliament when such Orders have received the approval of the House of Commons? That is an interesting inquiry, because, is very difficult really to understand where the trade of the country is under this legislation. Inquiries are held, the results are reported to the Government, long delays take place, and finally Orders are made or promised, and, when they are presented to the House of Commons, and if they receive the approval of the House, apparently, under this Clause, the Government will still, although a Part Order has been made, have the right in certain cases to set aside the decision of the House and of their protectionist followers that the duty shall be imposed. It is obvious from what I have said that it is a subject which, so far from being small or unimportant, deserves the closest study, and I invite the Chancellor of the Exchequer to give answers at least to the two questions which I have ventured to ask him.

7.0 P.M.

Mr. LYLE-SAMUEL: The Chancellor of the Exchequer interrupted my hon. and gallant Friend the Member for Leith (Captain W. Benn) to say that he was unable to understand him or to follow his argument. I sympathise with the Chancellor of the Exchequer, and whilst I am talking, and when I sit down, it will be quite competent for him to say that he was unable to understand me. When, however, the right hon. Gentleman has explained to the Committee the purpose of this Clause as it will affect businesses
in this country, no one will he able to understand him, and we shall then sympathise with him. As one reads this Clause, one is bound to ask where is the business in it, and where is the sense in it. There is this discretionary power. Just let us imagine, and I would ask the Chancellor of the Exchequer to imagine it. Business men, sufficiently harassed by a thousand business and financial considerations, have to be bothered by not knowing whether or not any particular line of goods will recommend itself to the Treasury after consultation with the Board of Trade. The trade of England was never built up by business manufacturers having to bother themselves as to whether, after a consultation between the Treasury and the Board of Trade, and the exercise of certain discretions, they can go ahead or must hold back. I would ask the Chancellor of the Exchequer, after this consultation has been held and if there is a difference, who is to be the final arbiter and who is ultimately to decide whether or not business men should be hampered or should be free under this Clause?
I should like to ask the right hon. Gentleman another question, to which I attach very great importance. Does he not think it a most unfortunate thing, with reference to business matters, that discretionary powers are left either to the Board of Trade or to the Treasury to say how a business is to be affected by Acts of Parliament? Discretionary powers! A flat tariff everyone can understand. An exaction upon a business, a duty upon a business, a Corporations Profits Tax, any tax upon a business, a flat rate, are understandable; but discretionary powers! Vested in whom? Vested in officials who know nothing of the practical conduct of the business; harassing the heads of businesses, who do riot know how the officials will view a thing in January compared with the way in which they viewed it last October harassing cashiers and the financial Departments as to whether they may have to pay so much money in order to get in a certain quality of goods and whether the discretionary powers are with them or against them. I say, with great respect to the Chancellor of the Exchequer, that anyone who tries to speak about this Clause speaks about it in a fog. When he replies, I say with great respect, he will
speak in a fog. No one knows how it is going to affect the practical conduct of businesses, but everyone does know that every business man will resent it. Whilst I have no hopes of any reply the right hon. Gentleman can make, I think this is one of the least workable and least justifiable Clauses included in the Finance Act.

Sir R. HORNE: I hope I may be allowed to remind my hon. Friends, after what took place last night, that this Debate has occupied three hours and we have not yet got Clause 8. [HON. MEMBERS: "It is due to your friends!"] I do not think it is fair to this side of the Committee to say that the time has been occupied this afternoon by them. My hon. Friends cannot complain as to the shortness of my speeches or replies. I entirely agree with one remark of my hon. Friend who spoke last, that discretions under an Act of Parliament are not a good thing and lead to uncertainty, and that they are things one would very much rather avoid. The misfortune of this Amendment is that it seeks to increase the discretion and to make the uncertainty still greater than is the case under the Clause at present. I do not think there is a great deal in what the hon. and gallant Member for Leith (Captain W. Benn) apprehends. I believe, while he usually gives very diligent study to these matters, that a little more deliberation on his part would have explained it to him. There is no difficulty about the Act itself in this respect when there is a Schedule of the class of articles which may come under the Act, and there is a provision that the Board of Trade shall issue Schedules of those things which come under the general definition at that time. Therefore, the trader knows where he is in regard to

this matter. [HON. MEMBERS: "Oh, oh!"]

On the question of identity, if the identity of the article is lost then no duty is chargeable. What I failed to understand in my hon. and gallant Friend's speech was that part of it wherein he suggested that there were cases in which it would be impossible to tell whether the identity was lost or not. That is really impossible. A decision must be come to in those cases whether identity is lost or not. If the identity is lost, then the duty is not chargeable. On the other hand, if the identity is not lost, there still arises a subsequent question whether the dutiable article is something so small in relation to the whole compound that it is worth charging. That is raised in the present Clause, and we provide that where it is something infinitesimal to all the compounds, although its identity is preserved, it shall then be in the discretion of the Treasury entirely to exempt from duty in that case.

Captain BENN: Will the right hon. Gentleman answer my question, whether this applies to Part II?

Sir R. HORNE: There is no difficulty about that. It will apply to any article under Part II brought within the Act. That is to say that if under Part II the Committee appointed under the Act decides that certain articles coming from certain countries are dutiable, then the other question will still arise whether the amount of the dutiable article in a compound is of sufficient importance really to be charged. The whole object of the present Clause is to decide that point.

Question put, "That the words proposed to be left out stand part of the Clause."

The Committee divided: Ayes, 278; Noes, 94

Division No. 158.]
AYES
[7.0 p.m.


Adkins, Sir William Ryland Dent
Beauchamp, Sir Edward
Bowles, Colonel H. F.


Agg-Gardner, Sir James Tynte
Beckett, Hon. Gervase
Bowyer, Captain G. W. E.


Amery, Rt. Hon. Leopold C. M. S.
Bell, Lieut.-Col. W. C. H. (Devizes)
Brassey, H. L. C.


Armstrong, Henry Bruce
Bellairs, Commander Canyon W.
Breese, Major Charles E.


Ashley, Colonel Wilfrid W.
Benn, Sir A. S. (Plymouth, Drake)
Bridgeman, Rt. Hon. William Clive


Atkey, A. R.
Benn, Capt. Sir I. H., Bart.(Gr'nw'h)
Briggs, Harold


Baird, Sir John Lawrence
Bennett, Sir Thomas Jewell
Broad, Thomas Tucker


Balfour, George (Hampstead)
Betterton, Henry B.
Brown, Brig.-Gen. H. C. (Newbury)


Banbury, Rt. Hon. Sir Frederick G.
Bigland, Alfred
Buckley, Lieut.-Colonel A.


Banner, Sir John S. Harmood-
Birchen, J. Dearman
Bull, Rt. Hon. Sir William James


Barnes, Rt. Hon. G. (Glas., Gorbals)
Bird, Sir William B. M. (Chichester)
Burdon, Colonel Rowland


Barnett, Major Richard W.
Blair, Sir Reginald
Burgoyne, Lt.-Col. Sir Alan Hughes


Barnston, Major Harry
Blake, Sir Francis Douglas
Carr, W. Theodore


Barrand, A. R.
Borwick, Major G. O.
Carter, R. A. D. (Man., Withington)


Bartley-Denniss, Sir Edmund Robert
Boscawen, Rt. Hon. Sir A. Griffith-
Casey, T. W.


Cecil, Rt. Hon. Sir Evelyn (Aston)
Hopkins, John W. W.
Rankin, Captain James Stuart


Chamberlain, Rt. Hn. J, A. (Birm, W.)
Horne, Sir R. S. (Glasgow, Hillhead)
Ratcliffe, Henry Butler


Chamberlain, N. (Birm., Ladywood)
Hunter, General Sir A. (Lancaster)
Rawlinson, John Frederick Peel


Cheyne, Sir William Watson
Hunter-Weston, Lt.-Gen. Sir Aylmer
Reid, D. D.


Churchman, Sir Arthur
Hurd, Percy A.
Remer, J. R.


Clay, Lieut.-Colonel H. H. Spender
Hurst, Lieut.-Colonel Gerald B.
Remnant, Sir James


Clough, Sir Robert
Inskip, Thomas Walker H.
Richardson, Sir Alex. (Gravesend)


Coats, Sir Stuart
Jackson, Lieut.-Colonel Hon. F. S.
Richardson, Lt.-Col. Sir P. (Chertsey)


Cobb, Sir Cyril
James, Lieut.-Colonel Hon. Cuthbert
Roberts, Rt. Hon. G. H. (Norwich)


Cockerill, Brigadier-General G. K.
Jephcott, A. R.
Roberts, Sir S. (Sheffield, Ecclesail)


Cohen, Major J. Brunel
Jodrell, Neville Paul
Robinson, S. (Brecon and Radnor)


Colfox, Major Wm. Phillips
Johnson, Sir Stanley
Robinson, Sir T. (Lanes, Stretford)


Colvin, Brig.-General Richard Beale
Jones, Sir Evan (Pembroke)
Rodger, A. K.


Conway, Sir W. Martin
Jones, Henry Haydn (Merioneth)
Rothschild, Lionel de


Cralk, Rt. Hon. Sir Henry
Kidd, James
Rutherford, Colonel Sir J. (Darwen)


Curzon, Captain Viscount
King, Captain Henry Douglas
Rutherford, Sir W. W. (Edge Hill)


Dalziel, Sir D. (Lambeth, Brixton)
Lane-Fox, G. R.
Samuel, A. M. (Surrey, Farnham)


Davidson, J. C. C. (Hemel Hempstead)
Larmor, Sir Joseph
Samuel, Samuel (W'daworth, Putney)


Davies, Alfred Thomas (Lincoln)
Lewis, Rt. Hon. J. H. (Univ., Wales)
Sanders, Colonel Sir Robert Arthur


Davies, Thomas (Cirencester)
Lewis, T. A. (Glam., Pontypridd)
Sassoon, Sir Philip Albert Gustave D.


Dawson, Sir Philip
Lister, Sir R. Ashton
Scott, A. M. (Glasgow, Bridgeton)


Dewhurst, Lieut.-Commander Harry
Lloyd, George Butler
Scott, Sir Leslie (Liverp'l, Exchange)


Doyle, N. Grattan
Lorden, John William
Seddon, J. A.


Du Pre, Colonel William Baring
Loseby, Captain C. E.
Seely, Major-General Rt. Hon. John


Edwards, Major J. (Aberavon)
Lowe, Sir Francis William
Shaw, William T. (Forfar)


Edwards, Hugh (Glam., Neath)
Lyle, C. E. Leonard
Shortt, Rt. Hon. E. (N'castle-on-T.)


Erskine, James Malcolm Monteith
M'Donald, Dr. Bouverie F. P.
Smith, Sir Harold (Warrington)


Eyres-Monsell, Com. Bolton M.
Mackinder, Sir H. J. (Camiachie)
Sprot, Colonel Sir Alexander


Falcon, Captain Michael
McLaren, Robert (Lanark, Northern)
Stanley, Major Hon. G. (Preston)


Falle, Major Sir Bertram Godfray
M'Lean, Lieut.-Col. Charles W. W.
Stanton, Charles Butt


Farquharson, Major A. C.
Macleod, J. Mackintosh
Starkey, Captain John Ralph


Fell, Sir Arthur
McNeill, Ronald (Kent, Canterbury)
Steel, Major S. Strang


FitzRoy, Captain Hon. Edward A.
Macpherson, Rt. Hon. James I.
Stephenson, Lieut.-Colonel H. K.


Foreman, Sir Henry
Macquisten, F. A.
Stewart, Gershom


Forestier-Walker, L.
Magnus, Sir Philip
Sturrock, J. Leng


Forrest, Walter
Mallalieu, Frederick William
Sueter, Rear-Admiral Murray Fraser


Foxcroft, Captain Charles Talbot
Marriott, John Arthur Ransome
Sugden, W. H.


Fraser, Major Sir Keith
Martin, A. E.
Surtees, Brigadier-General H. C.


Frees, Sir Walter de
Meysey-Thompson, Lieut.-Col. E. C.
Sutherland, Sir William


Fremantle, Lieut.-Colonel Francis E.
Middlebrook, Sir William
Taylor, J.


Ganzoni, Sir John
Mildmay, Colonel Rt. Hon. F. B.
Terrell, George (Wilts, Chippenham)


Gardner, Ernest
Molson, Major John Elsdale
Thomson, F. C. (Aberdeen, South)


Gee, Captain Robert
Mond, Rt. Hon. Sir Alfred Moritz
Thomson, Sir W. Mitchell- (Maryhill)


Gibbs, Colonel George Abraham
Moraine, Captain Algernon H.
Tickler, Thomas George


Gilbert, James Daniel
Morrison, Hugh
Townley, Maximilian G.


Glimour, Lieut.-Colonel Sir John
Morrison-Bell, Major A. C.
Tryon, Major George Clement


Glyn, Major Ralph
Munro, Rt. Hon. Robert
Turton, Edmund Russborough


Goff, Sir R. Park
Murchison, C. K.
Waddington, R.


Gould, James C.
Murray, Rt. Hon. C. D. (Edinburgh)
Wallace, J.


Goulding, Rt. Hon. Sir Edward A.
Murray, Hon. Gideon (St. Rollox)
Waiters, Rt. Hon. Sir John Tudor


Gray, Major Ernest (Accrington)
Nall, Major Joseph
Walton, J. (York, W. R. Don Valley)


Green, Joseph F. (Leicester, W.)
Neal, Arthur
Ward-Jackson, Major C. L.


Greene, Lt.-Col. Sir W. (Hack'y, N.)
Newman, Colonel J. R. P. (Finchley)
Ward, Col. L. (Kingston-upon-Hull)


Greer, Sir Harry
Newson, Sir Percy Wilson
Ward, William Dudley (Southampton)


Gretton, Colonel John
Newton, Sir D. G. C. (Cambridge)
Watson, Captain John Bertrand


Gritten, W. G. Howard
Nicholl, Commander Sir Edward
Weston, Colonel John Wakefield


Guest, Capt. Rt. Hon. Frederick E.
Nicholson, Reginald (Doncaster)
Wheler, Col. Granville C. H.


Guinness, Lieut.-Col. Hon. W. E.
Nicholson, William G. (Petersfield)
White, Col. G. D. (Southport)


Gwynne, Rupert S.
Nield, Sir Herbert
Williams, C. (Tavistock)


Hacking, Captain Douglas H.
Norman, Major Rt. Hon. Sir Henry
Willoughby, Lieut.-Col. Hon. Claud


Hall, Lieut.-Col. Sir F. (Dulwich)
Norris, Colonel Sir Henry G.
Wills, Lt.-Col. Sir Gilbert Alan H.


Hall, Rr-Adml Sir W.(Liv'p'l,W.D'by)
Norton-Griffiths, Lieut.-Col. Sir John
Wilson, Lt.-Col. Sir M. (Bethnal Gn.)


Hamilton, Sir George C.
Oman, Sir Charles William C.
Wilson, Col, M. J. (Richmond)


Hannon, Patrick Joseph Henry
Ormsby-Gore, Hon. William
Windsor, Viscount


Harmsworth, C. B. (Bedford, Luton)
Parker, James
Winfrey, Sir Richard


Harmsworth, Hon. E. C. (Kent)
Pearce, Sir William
Winterton, Earl


Harris, Sir Henry Percy
Pease, Rt. Hon. Herbert Pike
Wise, Frederick


Henderson, Lt.-Col. V. L. (Tradeston)
Peel, Col. Hon. S. (Uxbridge, Mddx.)
Wolmer, Viscount


Hennessy, Major J. R. G.
Percy, Lord Eustace (Hastings)
Wood, Hon. Edward F. L. (Ripon)


Herbert, Dennis (Hertford, Watford)
Perkins, Walter Frank
Wood, Sir J. (Stalybridge & Hyde)


Hickman, Brig.-General Thomas E.
Perring, William George
Wood, Major Sir S. Hill-(High Peak)


Hilder, Lieut.-Colonel Frank
Philipps, Sir Owen C. (Chester, City)
Woolcock, William James U.


Hills, Major John Waller
Pickering, Colonel Emil W.
Yate, Colonel Sir Charles Edward


Hinds, John
Pilditch, Sir Philip
Yeo, Sir Alfred William


Hoare, Lieut.-Colonel Sir S. J. G.
Pollock, Rt. Hon. Sir Ernest Murray
Young, Sir Frederick W. (Swindon)


Hood, Sir Joseph
Pownall, Lieut.-Colonel Assheton



Hope, Sir H. (Stirling &Cl'ckm'nn'n,W.)
Purchase, H. G.
TELLERS FOR THE AYES.—


Hope, Lt.-Col. Sir J. A. (Midlothian)
Raeburn, Sir William H.
Colonel Leslie Wilson and Mr.


Hope, J. D. (Berwick & Haddington)
Randies, Sir John Scurrah
McCurdy.


NOES.


Acland, Rt. Hon. Francis D.
Barker, G. (Monmouth, Abertillery)
Benn, Captain Wedgwood (Leith)


Adamson, Rt. Hon. William
Barnes, Major H. (Newcastle, E.)
Bentinck, Lord Henry Cavendish-


Ammon, Charles George
Barton, Sir William (Oldham)
Bowerman, Rt. Hon. Charl[...]


Banton, George
Bell, James (Lancaster, Ormskirk)
Bramsdon, Sir Thomas




Briant, Frank
Henderson, Rt. Hon. A. (Widnes)
Roberts, Frederick O. (W. Bromwich)


Bromfield, William
Herbert, Col. Hon. A. (Yeovil)
Robertson, John


Brown, James (Ayr and Bute)
Hirst, G. H.
Royce, William Stapleton


Cairns, John
Hodge, Rt. Hon. John
Sexton, James


Carter, W. (Nottingham, Mansfield)
Hogue, James Myles
Shaw, Thomas (Preston)


Cecil, Rt. Hon. Lord R. (Hitchin)
Holmes, J. Stanley
Sitch, Charles H.


Clynes, Rt. Hon. John R.
Irving, Dan
Smith, W. R (Wellingborough)


Collins, Sir Godfrey (Greenock)
John, William (Rhondda, West)
Spencer, George A.


Davies, A. (Lancaster, Clitheroe)
Jones, J. J. (West Ham, Silvertown)
Spoor, B. G.


Davies, Evan (Ebbw Vale)
Jones, Morgan (Caerphilly)
Sutton, John Edward


Davies, Rhys John (Westhoughton)
Kiley, James Daniel
Swan, J. E.


Davison, J. E. (Smethwick)
Lambert, Rt. Hon. George
Thomas, Rt. Hon. James H. (Derby)


Edwards, C. (Monmouth, Bedwellty)
Lawson, John James
Thomson, T. (Middlesbrough, West)


Entwistle, Major C. F.
Lunn, William
Thorne, W. (West Ham, Plaistow)


Finney, Samuel
Lyle-Samuel, Alexander
Tillett, Benjamin


Foot, Isaac
Maclean, Neil (Glasgow, Govan)
Walsh, Stephen (Lancaster, Ince)


Galbraith, Samuel
Maclean, Rt. Hn. Sir D. (Midlothian)
Waterson, A. E.


Gillis, William
Mills, John Edmund
Watts-Morgan, Lieut.-Col. D.


Graham, D. M. (Lanark, Hamilton)
Mosley, Oswald
Wedgwood, Colonel Josiah C.


Graham, W. (Edinburgh, Central)
Murray, Hon. A. C. (Aberdeen)
White, Charles F. (Derby, Western)


Grundy, T. W.
Murray, Dr. D. (Inverness & Ross)
Wignall, James


Guest, J. (York, W. R., Hemsworth)
Myers, Thomas
Williams, Col. P. (Middlesbrough, E.)


Hall, F. (York, W.R., Normanton)
Newbould, Alfred Ernest
Wilson, James (Dudley)


Hallas, Eldred
O'Grady, Captain James
Wilson, Rt. Hon. J. W. (Stourbridge)


Halls, Walter
Parkinson, John Allen (Wigan)
Wood, Major M. M. (Aberdeen, C.)


Hartshorn, Vernon
Rattan, Peter Wilson
Young, Robert (Lancaster, Newton)


Hayday, Arthur
Rendall, Athelstan



Hayward, Evan
Richardson, R. (Houghton-le-Spring)
TELLERS FOR THE NOES.—




Mr. T. Griffiths and Mr. Kennedy.


Question, "That the Clause stand part of the Bill," put, and agreed to.

Clause ordered to stand part of the Bill.

CLAUSE 9.—Entertainments duty declared to be chargeable on certain payments.)

For removing doubts it is hereby declared that Entertainments Duty within the meaning of Section one of the Finance (New Duties) Act, 1916, is by virtue of that Act chargeable on the following payments, that is to say:

(a) payments for admission to an entertainment made to a person other than the proprietor of the entertainment; and
(b) payments of rent made in respect of an interest in any premises which is primarily acquired for the purpose of securing admission to an entertainment;

and accordingly in that Section the expressions "the proprietor of the entertainment" and "the proprietor" shall include and be deemed always to have included any person on whose behalf payments for admission to an entertainment are received.

The CHAIRMAN: Perhaps it will be, convenient if I mention that this is a declaratory Clause for removing doubts and does not raise the whole question of the Entertainments Duty. That comes up when the new Clauses are dealt with. The hon. Member (Mr. Newbould), I think, understands that, but I thought it advisable to intimate it to the Committee.

Mr. NEWBOULD: I beg to move, at the end of the Clause, to add the words
Provided, however, that the Entertainments Duty within the meaning of Section one of the Finance (New Duties) Act, 1916, as amended by this Clause, shall not be deemed to extend, and shall not apply in the case of any exhibition of a cinemato-
graph film or films generally described as a 'trade show' where such exhibition is mainly or primarily attended by persons to view such film or films for the purpose of trade.
The Clause has for its purpose the removal of doubts. I am not quite sure what doubts it purports to remove, but it raises in my mind one fresh doubt, and it is in order to get that removed that I have put down the Amendment. In the cinema trade it is customary to hold trade shows. It is done in this way. The proprietor of a cinema theatre lets it to the owner of a film in order that it may be shown to the trade. It is done mainly for the purposes of trade. It is quite true that these exhibitions are not necessarily confined strictly to people engaged in the trade. The actors and actresses who have played in a. film and their friends may attend a trade show. Various people on the fringe of the industry but not directly associated with it may attend those trade shows. But the real purpose of the show is for the trade purpose of exploiting the particular film or films shown, and all my Amendment is intended to ascertain is that paragraph (b) is not intended to apply to these trade shows. If the Chancellor of the Exchequer accepts my Amendment he loses nothing at all and merely clears away a doubt which this Clause certainly raises—a Clause which has for its purpose the removal of doubts. I hope the right hon. Gentleman will either accept the Amendment or assure me that the Clause will not have the effect which I fear it may have.

Sir R. HORNE: I think I can give the hon. Member the assurance he desires. If there be any doubt at all, and it is thought necessary to put in the words he asks, or something like them, I shall be very glad to do so on the Report stage, but my present state of mind is that no such qualification is required, for the kind of show he has described is entirely outside the purview of the Clause and could not in any circumstances be brought within it. The kind of circumstances in which these shows are held do not create the first requisite which makes the duty apply, namely, that of attendance at an entertainment, because in point of fact they are not attending an entertainment in the ordinary sense of the term, but attending a show for the purposes of the trade. In the next place, there is no charge for admission at such trade shows, and accordingly the very thing upon which the Entertainments Duty is levied, namely, the charge for admission, does not exist. Accordingly, as it appears to me at present, and as I am advised also, there is no necessity at all for the words the hon. Member proposes.

Mr. NEWBOULD: I readily accept the right hon. Gentleman's assurance, but I would point out that paragraph (b), as drafted, says:
Payments of rent made in respect of an interest in any premises which is primarily acquired for the purpose of securing admission to an entertainment.
The exhibitor pays rent for the purpose of securing admission to a trade show. Whether you can call a trade show an entertainment or not is in doubt, but seing that these trade shows take place at West End cinemas or theatres and they have 2,000 people in, there is a doubt in my mind. I shall be satisfied if the right hon. Gentleman will look into it, and if the doubt exists make the necessary Amendment. I beg to ask leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

Clause ordered to stand part of the Bill.

CLAUSE 10.—(Income Tax and Super-tax for 1922–23.)

(1) Income Tax for the year 1922–23 shall be charged at the rate of five shillings, and the rates of Super-tax for that year shall, for the purposes of Section four of the Income Tax Act, 1918, as amended by the Finance Act, 1920, be the same as those for the year 1921–22.

(2) All such enactments relating to Income Tax and Super-tax respectively as were in force with respect to the duties of Income Tax and Super-tax granted for the year 1921–22, shall have full force and effect with respect to the duties of Income Tax and Super-tax respectively granted by this Act.

(3) The annual value of any property which has been adopted for the purpose either of Income Tax under Schedules A and B, or of Inhabited House Duty, for the year 1921–22, shall be taken as the annual value of that property for the same purpose fur the year 1922–23:

Provided that this Sub-section

(a) so far as respects the duty on inhabited houses in Scotland, shall be construed as referring to a year of assessment ending on the twenty-fourth day of May instead of to a year of assessment ending on the fifth day of April; and
(b) shall not apply to lands, tenements, and hereditaments in the administrative county of London with respect to which the valuation list under the Valuation (Metropolis) Act, 1869, is, by that Act, made conclusive for the purposes of Income Tax and Inhabited House Duty.

Motion made, and Question proposed, "That the Clause stand part of the Bill."

Sir F. BANBURY: I should like to draw attention to the necessity next year or in the future of making some attempt to reduce the very large taxation which is imposed by this Clause. With the reduction of the Income Tax to 5s. and a Super-tax of 4s. there are still a large number of people who during this year will be, paying at least 9s. of their income to the Government, and to that has to be added the necessary sinking fund for Death Duties, so, without exaggeration, I might say if the Clause is passed the result will be that there will be a large number of people who are paying at least 11s. a year to the Government. We are dealing later on with Clauses which seek to prevent evasion of Income Tax and Super-tax, and those Clauses are perfectly right. But what is the real reason for the evasion? It is only within the last three or four years that these evasions have taken place. It is because you put such an enormous burden upon the people as to amount to practical confiscation in many cases, and, consequently, people who perhaps are not so strict in their moral ideas as they should be are almost driven to evasion. Perhaps I should not say anything about moral ideas, because evasions have always been strictly legal, and people have endeavoured to find out how they can
avoid, without coming into contact with the law, the payment of a burden which it is almost impossible to bear. During the War people paid these enormous taxes without a murmur, but they did not expect that they were going to be kept on for an unlimited time after the War.
I have suggested more than once that Income Tax and Super-tax should be made into one tax. That would do away with the possibility of evasion of Super-tax, because people would be assessed for Income Tax and would have to pay it. There would be no question whether or not they were liable to Super-tax, and therefore one of the methods by which Super-tax is evaded would disappear. Another great advantage of that would be that everyone would know what people are paying. At present I believe a very large number of people—I do not mean rich people, but people with £300 or £400 a year—do not in the least know what the richer people are paying and it is very difficult for them to find out. They see in the papers that Income Tax is 6s. or 5s. and they see something about Super-tax, but as a rule there is no mention of the amount of the Super-tax. They do not know what the Super-tax is, or what it amounts to. If it was put on the paper that Income Tax was 9s. in the £1, if there was no Super-tax, everybody would know what the Income Tax was. It might be said that it would be difficult to impose an Income Tax of 9s. on everybody. It would be difficult when the Income Tax was a flat rate, but now it is graduated. Therefore it is easy to say that those people who are liable for 9s. Income Tax and Super-tax, should be charged Income Tax at the rate of 9s.
I put these suggestions forward in all seriousness, and I would commend them to members of the Labour party. We all desire that the state of unemployment should disappear, and in whatever part of the House we sit we desire that there should be employment for our own people in this country. You cannot have employment unless you have capital, you cannot have capital unless you have the means of saving, and you cannot save if such a large proportion of your profits are taken from you by the Government. Therefore, I hope that hon. Members opposite will not think that if there was a reduction in Income Tax and Super-tax
that it would benefit the rich man only. That idea is erroneous. It would benefit also the people who live by weekly wages and manual labour. It would give increased employment. [HON. MEMBERS: "Oh!"] Those are my views. It would give an opportunity for more factories to be built, more machinery to be bought, and it would tend to a general development of the industries of the country. Some of us, during the last two or three years, have been endeavouring to get the Government to reduce expenditure, but so far we have practically failed. There is one remedy which may eventually have to be put into force, and that is to refuse to give the Government the money to spend. If we were unwilling to vote money, the Government could not pay. I am not advocating that course, because that is something that should only be done in the very last resource; but unless the Government takes some steps to reduce expenditure we shall have to adopt something of that sort. I make these remarks in no spirit of hostility to the Government, and I hope they will be considered by the Chancellor of the Exchequer.

Colonel WEDGWOOD: The right hon. Baronet will forgive me if I say that the remarks which he has just made, which apparently received the general approval of the Committee, and apparently the approval of Members sitting beside me, are very disastrous remarks to go out to the public. The right hon. baronet knows that they are perfectly unsound.

Sir F. BANBURY: They may be unsound, but I do not think so. It is a matter of opinion.

Colonel WEDGWOOD: I think on reflection the right hon. Baronet will see that they must be unsound. It is not taxation which ruins trade, but expenditure which ruins it. The particular form of taxation which we are considering at the present time is 1s. off the Income Tax, and we are getting that reduction off the Income Tax by reducing the sinking fund. Does the right hon. Baronet really think that it helps trade to reduce the repayment of debt by reducing the Income Tax?

Sir F. BANBURY: I am not in favour of the suspension of the Sinking Fund.

Colonel WEDGWOOD: That is what you were arguing.

Sir F. BANBURY: I have never been in favour of the suspension of the Sinking Fund. What I have said was that we must reduce expenditure, and that we could reduce it by doing away with some of the offices created during the War, and reducing the expenditure on the Civil Service.

Colonel WEDGWOOD: The right hon. Baronet is advocating the reduction of the Income Tax, although he knows perfectly well that that reduction is obtained at the expense of honest finance. So long as the expenditure remains constant and you reduce taxation by reducing the repayment of debt, you are doing nothing whatever to benefit trade. Trade would benefit infinitely more if the £51,000,000 that are being lost to the Exchequer by reducing the Income Tax were collected from the public of this country and used for the repayment of debt. If used for the repayment of debt, the money would go back into trade, capital would become cheaper, trade would develop, and production would become cheaper. Instead of its being used for the repayment of debt, it means putting £50 into that man's pocket, £60 into another man's pocket, £100 into another man's pocket, and they will spend it. They will squander it and it will not go back into trade. A great deal of it will be spent at Monte Carlo. Instead of benefiting trade, the Chancellor of the Exchequer, as the right hon. Baronet knows perfectly well, by that action is really damaging trade. It is not a fact that by reducing taxation you are going to help trade. You must reduce expenditure. The one sound argument made by the right hon. Baronet was that the only way to stop this extravagant Government, was to refuse money, and then they would bring their expenditure down. That argument was quite right, but the rest of his speech was wrong.
The right hon. Baronet complains that the wicked, foolish, uneducated working classes do not know what the Super-tax is. Surely every rich man when he pays Super-tax tells the public all about it. Are we not told that three-fourths of a rich man's income is going in payment of taxation? It is very nice to hear that, but nobody knows better than the right hon. Baronet that although he signs a cheque he collects it from the consumer. Be passes the tax on. With regard to the
Corporation Profits Tax, the right hon. Baronet gets the railways exempted for three years under this Budget, for the very good reason that the railway companies, being monopolists, are not able to pass the tax on to the consumer. Other industries pay the Corporation Profits Tax, and are quite ready to pay it, because they know that it goes on the overhead charges of the business and falls upon the community in the long run. The rich man signs a cheque but the rich man, through the natural organisation of our present competitive system, collects from the consumer the money required for the cheque paid to the Government. I think that is generally recognised. Hon. Members opposite complain about the heavy taxation they have to pay when it suits their purpose, and when it suits their purpose on another occasion they say to the Labour Members, with tears in their voice: "Do you not realise that I am not really paying this cheque, and that it comes upon the working man?" Of course it does. When it suits the right hon. Baronet's arguments to say that he does not pay the tax, the workman pays it, he uses it. On the other hand, when the right hon. Baronet wants to show what agonies the big financiers suffer owing to the Super-tax and the Income Tax, he takes a different line, and says that the rich man pays the tax. He cannot have it both ways.
Let us stick to sound economics. Let us realise that two and two make four, even in the House of Commons, and that when you put heavy taxes upon business, the inevitable result is that the cost of production is greater, that the article which the business produces costs more to produce. There is another point which ought to he made in view of the lecture which we have had from the right hon. Baronet. What about reducing direct taxation or reducing indirect taxation? Which really is the best for trade? The right hon. Baronet told us, with almost a break in his voice, that he wanted reduction in Income Tax in order that there might be more employment in this country. Would it not be better for employment in this country if an equal amount of taxation were remitted from the indirect taxes? If you take £10,000,000 of taxation off the Income Tax, it does not benefit trade so much as would be the case if it were taken off sugar or tea. If it were taken off sugar
or tea it would mean that at the end of the week every working man would have more money to spend; everybody would have more money to spend. They would not throw that money into the sea. They would buy the things they wanted with that money. It would mean that more people would be employed satisfying their wants, and every penny reduction off indirect taxation would go back into trade, thereby increasing production and employment. Hon. Members opposite may say that exactly the same thing would happen in regard to reduction of Income Tax. They will say that if they get a certain sum off the Income Tax it means that they buy more things than they would otherwise buy, that people would be employed in producing the articles they required, and that, in the long run, it is the same thing—more employment all round. It all depends how the money is spent. The object of reducing the indirect taxation is that you produce the maximum amount of employment. A great deal of the increased expenditure, due to the reduction of Income Tax, will be spent in this country, but not all. Therefore, it is best for trade to reduce indirect taxation, which will increase production here and increase employment. I apologise to the Committee for keeping them so long, but I was drawn into this argument on account of the speech of the right hon. Baronet, a speech which, coming from him, where we usually get sound economics, was, perhaps, unfortunate at the present moment.

Mr. HOPKINSON: In common with most Members of the Committee I suppose I have done a certain amount of misrepresentation of the speeches of other Members, but the speech of the hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood) goes beyond anything I have ever heard in that direction. It was just a series of arguments which had nothing to do with what the right hon. Baronet (Sir F. Banbury) said The right hon. Baronet merely suggested that it would be of more educative value to the hon. and gallant Member himself and those who sit behind him, if an equivalent amount of taxation were collected in such a form that the people of this country would know exactly where the burden lay, and the hon. and gallant Member must admit that in any demo-
cratic form of State it is very desirable that people should have the fullest knowledge of where the money comes from and how it is being spent. As the right hon. Baronet said, if you have a graduated Income Tax with Super-tax in addition, it is extraordinarily difficult for the people of the country to know what taxation is being paid as between one citizen and another.
The hon. and gallant Gentleman told us he was going to give us sound economics this evening. I listened with great attention, but I am afraid that many of us were disappointed, and I would like to give him this thought to sleep upon to-night. Let him consider whether a graduation of tax with a Super-tax is sound economics or not. To my mind, it appears that, if there is to be a graduation of Income Tax at all, the incidence ought to be made heaviest on incomes where they are small rather than where they are large. The graduation of Income Tax ought to be such that Income Tax shall be heavier on small incomes than on large. For this reason, that incomes generally up to £400 or £500 per annum are spent entirely by the people who earn them, or the people who inherit them, but incomes above £10,000 per annum are very largely reinvested in the industries of this country, and if you graduate the Income Tax and the Super-tax in the way in which it is done at present—I make a present of this idea to the Chancellor of the Exchequer—you put a heavy tax on the capital of the country, and therefore reduce the possibility of greater wealth production and a better condition of living for the worker in the future.

Mr. N. MACLEAN: Hon. Members on both sides have explained what they are pleased to call sound economics. I think they are more sound than economic. The hon. Member for Mossley (Mr. Hopkinson) has put forward one of the most absurd ideas of taxation which have ever been placed before this Chamber, that is that the smaller the income the more heavily it should be taxed. The further down the scale of income the higher the graduation should be. The bricklayer's labourer earning 30s. a week now and again is to have the heaviest graduation upon the 30s. a week, while the city financier with his £10,000 and over is to get off with the lightest graduation. If the
hon. Member for Mossley were to go down to his constituents and advocate this sort of doctrine be would never come back to the House.

Mr. HOPKINSON: I was not advocating it. I was merely stating it as a fact of economics.

Mr. MACLEAN: If the hon. Member believes it to be a fact in economics then he is not doing his duty as one who claims to be a sound economist in not preaching it to his constituents in Mossley. If he is a sound economist then he is remaining in this House on a subterfuge. He is not teaching the working classes of his constituency those sound economic facts which would lead them to understand thoroughly what is actually paid by the wealthy people of this country in their Income Tax. The right hon. Baronet the member for the City of London (Sir F. Banbury) has put forward the idea that we ought to have a graduated tax so that the people of this country would understand exactly what the total sum of taxation placed on incomes really amounts to. I do not see anything wrong with that. The Labour party have been advocating practically that sort of thing for years, even before they had got a Member in the House. They have advocated time after time a graduated Income Tax, not graduated along the lines suggested by the hon. Member for Mossley from the highest income downwards until the poor charwoman would pay the highest rate of taxes in the country but the other way about, starting from some amount laid down as being the sum necessary to enable the individual who has earned or inherited that income to live upon it in comfort, and beyond that figure graduating Income Tax on an increasing scale according to the amount of income, until, having reached a certain figure, it would take away the greater part of anything above that figure under the graduated Income Tax which you would raise upon it. That I think is the sound economics so far as taxation goes.
I can understand the reason why the right hon. Baronet is so anxious that the people of this country should understand exactly how much is being levied in taxation upon income. We all realise that the average man who has not got an income, but has merely got wages of £1, £2 or £3 per week, does not worry about Super-tax. He does not know what it
means in many cases. He never has had to pay Super-tax, because his income is so low that even Income Tax will not be paid. Consequently, he does not bother much about Super-tax and the amount, but as the right hon. Baronet say, if you do away with Super-tax, or do not call it Super-tax, but add it to the Income Tax, it will be seen that the individual who has to pay what is called Super-tax is really paying, instead of 5s. Income Tax and a Super-tax of 4s., an Income Tax of 9s. in the £. I agree with that, but it is not with the object of educating the man in the street that the right hon. Baronet and the hon. Member for Mossley put forward that idea. If you say that there is an Income Tax of 9s. in the £, then with the love of justice which is inherent in every Britisher, no matter to what station he belongs, when he sees in the "Daily Mail," the "Sunday Express," the "Sunday Pictorial," and all the other papers, stunt articles pointing out that the wealthy people of this country have to pay this enormous Income Tax of 9s. in the £, and suggesting that 1s. in the £ should be knocked off the tax, it is said that is in the £ would never be missed, and they secure, not only 1s. in the £ off the tax, but bring about that which the right hon. Baronet and the hon. Member want, an actual reduction in the Income Tax, an actual bringing down of the graduated scale.
Where you have, as you have in this country to-day, to meet the enormous expenses which are a consequence of the War, we must find money, and we can only get this money to pay Sinking Fund and interests on our debts by levying taxation upon something in this country. The Income Tax is one of the methods of carrying on that work in this country. The people who benefit most out of the charge are the very people for whom the right hon. Baronet and the hon. Member speak, because they have the largest incomes in this country and they have got the greatest advantage out of the victory of the Allies. Now we have them trying to escape the responsibility of paying, out of the wealth they possess, their full share of that which they are enjoying because of the victory of the Allies. I think it, is absurd for the hon. Member to preach sound economics, because he is not a sound economist.
His facts are not facts, but theories. Theories are not facts until they are applied. If some hon. Member would take the hon. Member into the Library and give him a lecture on sound economics, it might be of some benefit to him. I hope that before the hon. Gentleman again intervenes in Debate he will give a thought to what, after all, sound economics are, and see if there is not a way in which those economic theories in which he believes can be applied for the benefit of the taxpayers of the country. If he is able to show that that can be done, he will contribute more to the education of the Committee than he is doing at present, when he is only contributing to its hilarity.

8.0 P.M.

Mr. E. HARMSWORTH: The Debate seems to be wandering round the question, whether direct or indirect taxation is the better form. Both forms of taxation are bad and we want to keep them down as much as possible. The real question is whether we can reduce taxation, not only direct, but indirect. I agree with the hon. Member who has just spoken that we must reduce indirect taxation when possible, taxation on such things as tea, beer, coffee. Yesterday we had a discussion on tea and I agreed with what was said by hon. Members on these benches, because taxes on various commodities keep up the cost of living and thus produce the same effect as direct taxation. Direct taxation besides keeping up prices does something worse, because it prevents new capital from being invested in any form of enterprise to enable the country to carry on, and it also prevents the country from becoming more prosperous as, unless capital is saved, the country would become less prosperous, though hon. Members on those benches may be pleased if the country does become less prosperous—[HON. MEMBERS: "No!"]—or if certain individuals in the country become less prosperous, and save less money. But I think that some foreign countries might become more pleased because they would get the trade which we must lose in consequence. I listened to the speech of the hon. Member for Newcastle-under-Lyme, and I thought it was extremely strongly favour of the reduction of the Income Tax, He said that the people who now pay
Income Tax are not the people who suffer, but that the people who suffer are the consumers, because the people who pay Income Tax make the consumers pay more for their goods. I do not think that is the case. Assume for the moment that it is true. Is it- not an even greater reason for reducing the Income Tax? Surely the question of Income Tax is a national question, and not a question of one group or one section of the community. The question affects not only the man who pays Income Tax. Every person in the community suffers from a grievous Income Tax, which is a direct levy, and almost a capital levy, upon the whole community, and must have its effect on every trade and industry in the country. On every business, whether big or small, it has its effect, and surely on all the people employed in that business, not only those high up with large salaries, but those who get only wages. It must have the effect of producing lower wages, and of fewer people being employed.
The point to consider is how we can get the Income Tax down. I agree with the statement that Income Tax should not be reduced by suspending the interest on the Sinking Fund. It should have been reduced by cutting down national expenditure. That is the only way of doing it. I do not want to go into the question whether it was advisable to reduce Income Tax by is. I think the Government were probably quite right in taking the risk, and in trying thus to give an impetus to trade. They should have had a better balance sheet to present to the country. Next year the country will not be satisfied with the Income Tax of this year, but will expect another 1s. to come off. That is what I wish to urge upon the Government now. This is the only opportunity we have of telling the Government that next year the country will expect a further reduction of Income Tax and in all other taxes. The only possible way to make that possible is to cut down national expenditure. I would urge the Chancellor of the Exchequer and the Government to review national expenditure once more, and to cut down in every Department. That is the most pressing question of the hour. If trade is to be got going again,
and business in the country is to be helped and unemployment checked, it can be done only by cutting down taxation.

Mr. RONALD McNEILL: The speech, which the hon. Member for Govan (Mr. N. Maclean) made, displayed a good deal of indignation in the reply he made to the hon. Member for Mossley (Mr. A. Hopkinson). The hon. Member rediculed the idea that the hon. Member for Mossley had been expressing sound economics. The hon. Gentleman is really confusing two things which are perfectly distinct. The hon. Member told my hon. Friend that if he went to his constituency and preached the same doctrine that he preached in this House he would never come back. I think that is probably true. That is because the hon. Gentleman opposite was confusing sound economics with practical politics. They are two totally different things. I doubt very much if any Member of this House would be likely to come back if he preached sound economics in his own constituency. As a matter of fact, that is one of the great difficulties we all have in dealing with these questions. Sound economics are a very cruel thing. Equity is one thing and sound economics a very different thing. In practical politics we constantly are obliged to say good-bye to sound economics, in order that we may do justice between one class and another. Take the case which was spoken of by the hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood), the question whether relief from direct taxation or from indirect taxation is of the greater benefit, from the point of view of industry and employment. He said quite truly that the saving of money by the reduction of expenditure is the great point, and that the crucial matter is how the money saved is spent. But as a matter of practical politics and of practical knowledge we all know that whereas the saving of direct taxation may, and probably will, result in investment which will give employment, the saving of very small sums through the consumer on indirect taxation will have no such result.
Take the Tea Duty or the Sugar Duty. It is perfectly right, apart altogether from whether it is sound politics or not, that we should reduce, as far as possible, the burden on the consumer, in order to do justice and to enable people to live with
decent comfort. But if it comes to a question of what will give employment and what will be invested, we know perfectly well that a small weekly saving will not result in investment to give employment, but that a reduction of direct taxation, especially on the larger incomes, will have that result and will give employment. Therefore, I believe that the hon. Member for Mossley, although he was not speaking practical politics, because such a thing could not be done, was speaking perfectly sound economics when he said that the proper graduation of income would be higher on the low income. [HON. MEMBERS: "No!"] Yes; it was sound economics. I say again that the hon. Member for Govan is confusing two things. Neither of us advocates such a graduation, but let us recognise the distinction between politics and economics. What is economics? It is the science that deals with the production of national wealth. [HON. MEMBERS: "And its distribution."] And its distribution, I agree. I do not want to pursue it, because it is an academic point. If you could have such a system of graduation as was suggested it would result, as a matter of fact, in a greater increase in the national wealth than the system which we have to pursue, not for an economic reason at all, but for the equitable reason of putting the greater burden on those who have the greater resources. That is equity, not economics. Therefore, I think that, although we must, of course, keep in view the reduction of the burden upon the people and maintain the balance which has always been maintained, roughly speaking, between indirect taxation and direct taxation, yet I join with my right hon. Friend the Member for the City of London (Sir F. Banbury) in saying that if next year the Government can give a further reduction in the very pressing burden of Income Tax on the industries of the country, not merely as a means of relieving people who require relief less than others, but for the purpose of increasing the general prosperity of the country out of which alone employment can grow, they will be taking the right course.

Mr. MACLEAN: Seeing that the hon. Gentleman desires prosperity for the country, how does the proposal to place the heavier tax on the lower incomes produce it?

Mr. R. McNEILL: I did not say that.

The CHAIRMAN: I am not fully aware of what has passed in the earlier discussion, but it seems to me that the discussion is now taking a range far wider than the Clause would allow.

Mr. R. McNEILL: It was the point raised by the hon. Member for Mossley which produced practically the whole of the speech of the hon. Member for Govan. I will answer the hon. Member briefly. I do not think it would produce prosperity to do what was suggested. The hon. Member for Mossley said was sound economics. Apart from that, we require equity and justice.

Mr. MYERS: It would be very difficult to justify the present reduction of Income Tax while we keep intact the tremendous burden of indirect taxation. I share the view of the hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood) that any reduction in taxation which is specifically applied to what can be termed luxuries will have considerably less benefit on the trade of the country than a similar reduction of taxation applied to the common necessaries of life, and that if the £50,000,000 reduction in Income Tax had been applied to the reduction of taxes upon food, a greater advantage to trade and commerce would have been forthcoming. Several hon. Members have urged that one of the methods whereby Income Tax can be reduced now and reduced still further in future is by a reduction in expenditure. There is considerable loose talk upon various political platforms, in the newspaper Press and in this House about reduction of expenditure. I think the time has come—

The CHAIRMAN: It is quite clear that this general discussion cannot be continued. The question is whether there shall be an Income Tax of 5s. in the £or not. It must be assumed that a certain sum of expenditure has to be met, and the question is whether it should be met by a 5s. Income Tax or not.

Mr. MYERS: With all respect, I say it is very unfortunate that the Debate has proceeded on the lines hitherto followed, with all these aspects of the matter brought in. If we are restricted now to
the point you have laid down, having regard to the wide field that the discussion has taken hitherto, I do not feel justified in continuing the Debate.

Sir H. NIELD: It is unfortunate that you, Mr. Chairman, were not here when the discussion opened. It was not on a question of whether or not the Income Tax should be 5s. in the £. The right hon. Baronet the Member for the City of London (Sir F. Banbury), on the Clause being moved, took the opportunity of pointing out how desirable it was that Income Tax and Super-tax should be levied together as one sum and not separately. He went on to say that if that were done the burden of the joint tax would become apparent to the most simple-minded, and the result would be to bring home to the country the necessity for further reductions. That is how the Debate opened, and I do not desire to carry it further than that point. Super-tax is only another word for additional Income Tax. The Statute calls it additional Income Tax, and those who have occasion to negotiate with the authorities on this matter know how they insist that the same rules which apply to the levying of Income Tax should apply also to the levying of Super-tax. That being so, why should they not be levied as one? It would effect a great saving. It would mean getting rid of one Department, and that is a matter which should command the attention of the Chancellor of the Exchequer. In regard to the local authorities—certainly those of England and Wales—the two collections of local taxation have been merged into one, and the ratepayer receives a demand note which comprises the poor rate and the district rate, each of which was collected separately in former times. I earnestly ask the Chancellor of the Exchequer to consider this aspect of the matter. The lumping together of these taxes is simple and educative, and it would effect a very large saving. I venture to think the officials who now levy Income Tax have become used to the rules relating to Super-tax. It would he a mere matter of accountancy to add the requisite sums to the demand notes and we would get rid of the establishment which at present flourishes in Kingsway and keeps a very large and expensive building and has a very large and expensive staff. That would be a beginning of economy without
the least interference in Government work, and I hope the Chancellor of the Exechequer will consider it.

Mr. MOSLEY: I think I shall not stray without the ambit of your ruling, Mr. Chairman, in referring to one or two of the arguments which have been advanced from the opposite benches. I would like in this direction to animadvert for one moment to the argument employed, first of all, by the hon. Member for Mossley (Mr. Hopkinson) and supported by the hon. Member for Canterbury (Mr. R. McNeill). Their argument was, in brief, that the incidence of Income Tax should be heavier in exact proportion to the decline in income, and that those possessing small incomes should be taxed in a heavier degree than those possessing larger incomes, because in the case of the larger incomes more money was saved annually and re-invested. That remarkable argument was hailed with satisfaction by the hon. Member for Canterbury as sound economics. He pointed out in support of his belief that sound economics had no concern with equity. That is quite true, but sound economics are greatly concerned with efficiency. Efficiency, in fact, might be described as the keynote of sound economics. No one would contend that the heaviest pressure of taxation should be directed against those members of the community who have to contribute by their labour to the production of the wealth of the country, and that this would conduce to those sound economics which are desired by the hon. Gentleman. The contention of the hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood), to the effect that the suspension of the Sinking Fund in order to provide remission of Income Tax did not contribute to the end which the Government had in view, namely, the stimulus of trade, was greatly scoffed at from the opposite benches, but surely it is evident that the release of capital which, in all probability, would be re-invested in industry must conduce more to the stimulation of trade than a remission of taxation.

The CHAIRMAN: There are separate provisions in connection with the suspension of the Sinking Fund, and I think, on the question now before the Committee, the hon. Member must confine himself to Income Tax.

Mr. MOSLEY: I bow at once to your ruling, Sir, but I may point out, as a matter of order, that all this has been debated at great length in the course of this particular discussion, and it is difficult for me to know exactly in whose footsteps I may tread and in which direction I am debarred from going. The argument was advanced that this remission of Income Tax which we are now discussing was obtained by a raid upon the Sinking Fund, and consequently that this remission was unsound finance. Am I to understand that we are debarred from debating the methods by which this reduction is obtained?

The CHAIRMAN: The hon. Member states that a certain argument was adduced in the course of this discussion. It would be obviously unfair to prevent him referring to that, but I must ask him not to go beyond the matter iself.

Mr. WATERSON: On a point of Order. If an hon. Member is desirous of answering remarks made by another hon. Member opposite, will he be entitled to do so no matter whether his argument conies under the specific head of Income Tax or not?

The CHAIRMAN: That is a large proposition, and I am not desirous of pronouncing a universal opinion which will hold good in all cases. The hon. Member for Harrow (Mr. Mosley) mentioned a concrete argument which has been put forward, and I cannot refuse to allow him to answer it, but hon. Members must not go beyond the scope of this Clause in any further arguments they may adduce.

Mr. MOSLEY: I hope to keep within your ruling, Mr. Chairman. I was only going to answer the attempted refutation of the argument advanced. It is said that in the release of capital which has been invested in Government securities there is a far greater probability that the capital so released will be invested for the promotion of enterprise and industry. The argument is that it is more likely that capital so released from Government securities will be re-invested than that the shilling given to the taxpayer by this remission will in all cases and invariably be invested and so promote trade revival. It must be evident that it is not on those grounds that we can base our demand for a lower Income Tax. Then, again, with
very great confidence, another argument of the hon. and gallant Member for Newcastle-under-Lyme was rebutted from the opposite benches—his argument that the remission of indirect taxation as opposed to Income Tax, was equally efficacious in the matter of the stimulation of trade. The hon. Members opposite pointed out that in a remission of Income Tax the money not demanded of the taxpayer is more likely to be invested in industry than a remission of taxation to the indirect taxpayer, who will probably spend the money, but those advancing that argument altogether ignore the fact that all indirect taxation must raise the cost of living and that, wages being based upon the cost of living, the cost of production must inevitably he raised by indirect taxation. In fact, it is, if anything, more inevitable that the cost of industry should be raised by indirect taxation than by direct taxation, because if it be admitted that direct taxation raises the cost of production, then another argument of the hon. and gallant Member for Newcastle-under-Lyme is admitted, that the direct taxpayer who is engaged in commerce is not paying the tax out of his own normal income but is handing the tax on to the consumer.
I rather disagree with that argument. I think that in very many cases the tax is being paid out of the normal income of those engaged in the promotion of industry and that consequently it is not handed on to the consumer, and therefore the cost of production is not raised in all cases by direct taxation, but it must inevitably be raised in every case by indirect taxation, which raises the cost of living and consequently raises the cost of wages. I therefore cannot follow the arguments of those who assert with such confidence that a remission of direct taxation is very much more conducive to a trade revival than a remission of indirect taxation. We must face the fact that the greatest stimulus of all to trade is the repayment of debt, in that capital is released for investment, and beyond that we must recognise that much of taxation which is remitted will be spent on things that are unnecessary, and if money is spent by the individual on things that are unnecessary, it is just as badly spent, or very nearly as badly spent, as if it were spent by the State. If a rich man who
has received a remission of taxation of, say, £1,000 spends that money this autumn on a deer forest, trade will no more be stimulated than if it was spent on battleships by the State. Any luxury or unnecessary expenditure in times of economic stress, whether by the State or the individual, is equally vicious, and we cannot possibly contend that industry will benefit through money—

The CHAIRMAN: The hon. Member is now embarking on an uncharted sea, and I really must ask him to keep to the point.

Mr. MOSLEY: I certainly will not pursue that argument. I have contented myself with rebutting some of the extreme arguments, as I consider them, from the other side in favour of this reduction of direct taxation as opposed to the payment of Sinking Fund and the remission of indirect taxation, and I will now con-elude by saying that in my view the real benefit from a remission of 1s. of the Income Tax is a psychological benefit rather than anything that is materially conducive to a trade revival. I think it has this effect, that when taxation is lower, when direct taxation on men's earnings or on the interest on their money which they may have invested in enterprises, often of a speculative character, is reduced, they have a greater incentive to embark upon fresh enterprises, and enterprises which are of a speculative character, and in the event of success may open up vast new sources of work for the development of mankind; and so, as a psychological move, I welcome the remission of 1s. of direct taxation. That psychological benefit is equal, of course, in the case of a remission of indirect taxation, but I agree essentially with the remarks that have been voiced from all quarters of the Committee to the effect that a reduction, an all-round reduction, of taxation, involving a great psychological benefit to trade and industry in this country, is essential, and also that it is equally essential that debt should be repaid for the release of capital for the enterprises which are now so vitally necessary. On those grounds, I think we are entitled to press for a reduction of Government expenditure and to vote for any reasonable reduction of taxation on the ground that cutting off the supply is the only possible method of making this Government economical.

CLAUSE 11 (Computation of profits under Case III of Schedule D) ordered to stand part of the Bill.

CLAUSE 12.—(Income tax on, offices, employments and pensions to be chargeable under Schedule E.)

(1) Such profits or gains arising or accruing to any person from an office, employment or pension as are, under the Income Tax Act, 1918, chargeable to Income Tax under Schedule D (other than the profits or gains chargeable under Case V of Schedule D, or under Rule 7 of the Miscellaneous Rules applicable to Schedule D), shall cease to be chargeable under that Schedule and shall be chargeable to tax under Schedule E, and the Rules applicable to that Schedule shall apply accordingly subject to the provisions of this Act.
(2) Rule 2 of the Rules applicable to Cases I and II of Schedule D (which relates to the assessment and charge of weekly wage-earners), shall be deemed to be one of the Rules applicable to Schedule E.
(3) Rule 7 of the Rules applicable to Schedule E (which relates to the charge of tax in respect of offices and employments of profit held under a railway company), shall apply to all offices and employments held under and pensions paid by, a railway company:

Provided that nothing in this Sub-section shall affect the provisions relating to the quarterly assessment and the collection of Income Tax in the case of weekly wage-earners employed by way of manual labour.

(4) Paragraph (5) of Rule 18 of the Rules applicable to Schedule E shall have effect as though the words "or in which he is employed" were inserted at the end thereof.
(5) The following paragraph shall he inserted at the end of Rule 5 of the Rules applicable to Schedule E:
"If any person proves to the satisfaction of the Commissioners concerned that the amount for which an assessment has been made in respect of his salary, fees or emoluments for any year of assessment exceeds the amount of the salary, fees or emoluments for that year, the assessment shall be adjusted and any amount overpaid by way of tax shall be repaid."
(6) The provisions of Sub-section (1) and Sub-section (3) of this Section shall have effect and shall be deemed always to have had effect, for the purpose of any assessment to Income Tax which is made or becomes final and conclusive after the first day of May, nineteen hundred and twenty-two, in respect of any employment (other than that of pa weekly wage-earner employed by way of manual labour) under any public department, or under any company, society or body of persons or other employer mentioned in Rule 6 of the Rules applicable to Schedule E.
1158
(7) Income Tax in respect of profits or gains which would, but for the provisions of this Section, have been chargeable under Schedule D for the year 1922–23, may be charged for that year either under Schedule D or under Schedule E, but the tax shall in all cases be computed in accordance with the provisions and Rules applicable to Schedule E as amended by this Act.

The CHAIRMAN: The Amendment in the name of the hon. and learned Member for Moss Side (Lieut.-Colonel Hurst) and other hon. Members—[at the end of Subsection (1) to insert the words
Provided that allowances granted under Royal Warrant to a widow in respect of her children shall not be treated as forming part of the pension or income of such widow for the purposes of her assessment for Income Tax, and shall cease to be so chargeable as against her"]—
would have to come as a new Clause.

Lieut.-Colonel WATTS-MORGAN: I beg to move, in Sub-section (2), after the word "wage-earners," to insert the words
have effect as though after the word 'quarter,' where that word secondly occurs, there were inserted the words less any cost of travelling to and from their places of employment,' and such rule as amended by this Sub-section.
When, during the War, the wage-earners were made subject to the Income Tax, they were granted a concession whereby a man could deduct from his wages, in the amount of assessment to Income Tax, the cost of travelling to and from his work. This concession was made mainly because of men having to remove during the War very large distances from their homes to their work, and now we are afraid that the Chancellor of the Exchequer has not got a proper understanding with regard to the situation that still continues. The concession was made at that time in the form of a Regulation, and the object of my Amendment is to continue that concession, on the ground that the conditions that obtained during the War have not yet been removed and will not be removed for some years to come. There may be other hon. Members who will be able to speak for their own districts, but I speak more directly for the industrial district of South Wales, both in regard to mining and other industries. Take mining industry houses, which are still very scarce. We have men travelling from Cardiff, Barry, Swansea and Newport almost to the ends of the valleys, and especially the valleys converging on
Cardiff. They travel distances of 22 to 28 miles from their homes to the pits. That means that where they are living at Cardiff, or Llandaff, or anywhere around the Barry district, where houses are more plentiful than with us in the valley, it entails upon those men a cost of anything between £22 and £28 per annum to enable them to carry on their occupation. At a time like the present, when the cost of living is so high, they can ill afford that sum. The point may seem a small one to the Chancellor, but it is a very important one indeed to those men, who are forced to live a long distance from their work. It is a question of equity and justice as between them and the people in other spheres of life. Commercial people are allowed to put their expenses against their assessment of Income Tax, and it would only be a measure of justice and equity to these people that they should be allowed to account for any money they are paying to enable them to fulfil their occupation at the collieries, and thus be treated on exactly similar lines as other people in the country.

The SOLICITOR GENERAL (Sir Leslie Scott): It is quite true that this concession was made during the War, particularly owing to the necessity of large bodies of men leaving their homes and going, in some cases a great distance, to work at munition works especially. It was a concession made without statutory authority, and strictly speaking, was illegal. But it was made in order to meet the peculiar exigency of that time. The hon. Member who has moved the Amendment has moved it on the express ground that it is fair to put wage-earners, whose Income Tax is assessed quarterly, on the same footing in regard to expenditure as other classes of the community. That ground, of course, would have been a ground of almost irresistible force had it been a well-founded ground. But that is not the case, and, indeed, anticipating that possibly some question of the kind might arise, I took the trouble to bring here the leading book on the subject of the Income Tax Acts, in order to tell the Committee exactly what the legal position is. It has been quite clearly decided for many years, and is undoubtedly the law, that travelling expenses cannot be deducted. There was the case of a solicitor who carried on his profession at Worcester, and, on certain days of the
week, had to go to a neighbouring town some distance away, where he was clerk to the Justices, and he was told that those travelling expenses could not be deducted. In the same way, directors who live at a distance from the offices of companies where board meetings take place, are not allowed to deduct expenses in going from their house to those offices.
That being so, the main ground upon which the appeal to the Committee is made that wage-earners should be put upon the same footing as other people, not only fails, because it is not based upon a true appreciation of the actual position, but, indeed, it has exactly the opposite effect. To grant the Amendment would be to put this particular class of Income Tax payers, who pay on a quarterly assessment, on a different and privileged footing as compared with everybody else. When this concession was made during the War, to meet the peculiar case of the munition workers, other people in a very similar position, but not the same, made complaint that they were not given the same privilege. Those complaints, I am informed, have been very frequent from various classes of Income Tax payers, who think that their position is similar to that of the wage earners. Consequently, it was felt that, as the wage conditions began to recede into the background, although I appreciate that, in regard to housing, the position is still not normal, yet a time came when it was essential to deal with the matter of principle, in order that all Income Tax payers might be put on a footing of equity in regard to the basis of their assessment. Mr. McKenna, the Chancellor of the Exchequer who introduced it, authorised it as a purely temporary concession, and this year it has been expressly stated by the Chancellor of the Exchequer that, after due consideration, it was felt quite impossible to continue the concession as a special privilege to a particular class. There always must come a point of time where, as a matter of degree, you cannot say that the particular grievance continues to any extent as to justify peculiar and exceptional treatment.

Lieut.-Colonel WATTS-MORGAN: May I say that the grievance has existed for many years in our district so far as the scarcity of houses is concerned, and that there is no analogy between the case of
director travelling from his residence to his office in Cardiff or elsewhere and the workman who has to travel 24 miles to his work at the colliery?

Sir L. SCOTT: The case I took, I think, covered the case of the solicitor who is not entitled to make the deduction, and directors' position is the same. The Committee must take it there is no question of doubt about this; that the law is that travelling expenses cannot be deducted. Any idea that in any other classes of the community travelling expenses are allowed is erroneous, and the claim put forward cannot be put upon those grounds. If it be said in answer to the argument I put forward that it ought to be made general that travelling expenses should be treated as a deduction, then I would like to quote the findings of the Royal Commission upon Income Tax, which we all recognise was an extraordinarily impartial body and which made a Report which was received with a very wide measure of general approval. That Commission said
Travelling expenses incurred by the taxpayer in going from his place of residence to his business should not, in our view, be our allowed. The question of travelling expenses is one which reacts on other private expenses, such as the expenditure on rent and rates. It is more truly an expenditure or disposal of income than an expense essentially necessary to earn the income. We are of opinion that a general allowance for travelling expenses would result in very grave inequity.
There is another observation to be made, that one of the reasons present with the Royal Commission in expressing that opinion was that it is a very difficult thing indeed to deduct this. I cannot help feeling sympathy with the hon. and gallant Mover of this Amendment. I know the Rhondda Valley and the difficulties there. The valley is very narrow. There is no room for more houses, and you cannot put them on the tops of mountains. The result is that the workman has to go considerable distances, I know, in many cases. It is a hardship, but for all that you cannot make a general rule of this kind applicable to a vast number of taxpayers unless you make it general. You cannot do that merely because there is one particular small section in a particular locality that, under the existing law, feels a particular hard-
ship. I express sympathy, and I regret, on behalf of the Government, I am not able to express anything more.

Mr. CLYNES: The Solicitor-General has expounded to us the law on this question. But it would appear to me that it is desirable to consider aspects of this question other than the purely legal aspects. The law as it is now is not necessarily above Parliament. Parliament can elevate itself above the la[...] The law is what it is now because Parliament made it. This Order Paper in my hand is strewn with Amendments—this one at least being in order—proposing an Amendment of the law. It is not a sufficient answer to that Amendment to tell us what the law is, and to cite the practice that has so far been pursued. If these Amendments are in order in relation to the Bill which the Committee is now considering, it is within the province of the Committee to determine to change the law.

Sir L. SCOTT: Hear, hear.

Mr. CLYNES: If that is so, may I suggest that the case which my hon. and gallant Friend has put forward is a case for justice, and a case to judge in view of the different circumstances which have arisen. My hon and gallant Friend himself would be the first to admit that the law is against the workman in these expenses, and, therefore, my plea that the case is one for argument in view of the circumstances which now prevail. The workmen have no choice in these matters. The compulsion which drives them to travel many miles to their labour is a compulsion which penalises them, and they may be penalised to the extent of £20 or £30 in the year in paying travelling expenses to their employment in comparison with their fellow workmen who live close to their colliery, steel works, or other employment.
What does the Amendment propose? It is not to confer a privilege, but to remove a disability; to remove a real grievance and to create a state, not of favour or privilege, but of equity. That is what it aims at. I cannot believe that the administrative difficulties are insuperable.

Sir L. SCOTT: The right hon. Gentleman will forgive me for intervening, but in what way would he suggest he could differentiate in the cases? I have myself said that I recognise the hard case of the
Rhondda Valley, but there are other cases, and what is to prevent us, once we start, giving this concession as a general thing to everybody?

Mr. CLYNES: There must be some limit fixed—a low limit if you will—below which there would be no allowance for expenses. That is commonly done in connection with the numerous exceptions and exemptions which are strewn over the Income Tax paper which we receive. The House has, throughout all the handling of these questions in relation to every form of tax, shown consideration in cases of hardship where there are groups of persons or even individuals treated rather hardly by the incidence of the law. There is exemption for this, and for that. There is this exception and the other exception. In this case we are asking, as I said, not to put men into a privileged position, but in a position of something like equality with the neighbours who have not to travel and who earn the same wage. The position of the man who travels is that he is expending certain sums to earn his living, and that in order to get a certain income he must incur a certain expenditure. The claim in this Amendment is not to impose a tax upon that part of the workman's wage which he must pay in fares. This to him is really not income at all. He does not get any benefit whatever from it. If the country taxes him upon what is left after he has received his money and met the cost of travelling, then, I think, so far as any Government reasonably can give consideration, they should do so.
The illustration adduced by my right hon. Friend does not at all destroy the argument upon which this Amendment rests. I cannot imagine the Commission in the instances cited having in mind the workman. The Report speaks not of the workman's labour or his work, but of a man's business. When we are speaking of workmen's employment we do not speak of the workman's business at all. It is only when we come into the regions of business, in which a man earns not a few pounds a week but hundreds, and in some instances thousands, a year, that we talk of business. Clearly, what the Commission had in mind was the case of a man's business, and to allow him no remission of Income Tax from that
item of his income which was incurred in the pursuit of his business. That, however, is a different thing altogether from considering the case of the workman, and his ordinary means of employment.
There is another point. These fares are very much higher than they were, and distances are much longer. Housing and social conditions in industrial centres have driven the worker further and further away from his place of employment, so that in both ways the total cost has been very much increased until now it is considerably more than it used to be in the case of many workmen. If it be true that this only applies to odd cases, and a few instances in certain sections and parts of the country, then the revenue would lose very little by doing a just thing to those few who are affected. I am not, however, adducing that as an argument, but I wish to point out that there is a tendency more and more for an ever-increasing number of workmen to be forced into incurring costs in order to travel to and from their employment. If the workmen could get a house near to his work, or if he could get employment near to his house, there would be something to be said for the argument of the Solicitor-General in regard to treating all people alike. I suggest that no Commission, no law, and no precedent stands in the way of the Government accepting this Amendment, which clearly is aimed not at putting any class in a position of privilege, but would have the effect of placing every section of workman in exactly the same position.

Mr. INSKIP: It would be very wrong if any hon. Member got the impression that there was a lack of sympathy on this question with the miners employed in the Rhondda Valley.

Lieut.-Colonel WATTS-MORGAN: I hope the hon. Gentleman will not think that I was confining my proposal to the miners. I did not refer to other sections of workers because I did not want to bore the Committee by citing other cases.

Mr. INSKIP: My hon. and gallant Friend has anticipated my point. I hardly think the right hon. Gentleman (Mr. Clynes) has displayed his customary clearness of thought in suggesting that particular persons who travel to their work are entitled to any special consideration. In my constituency a number of people are obliged to live in
very hot, close, and expensive dwellings in order to be near their work. This Amendment might allow them to go and live in the country and save about 10s. a week. A season ticket might amount to about 10s. a week. A man could deduct that from his expenses, and then he could practically live rent free, and that would mean taxing those who have to live near to their work for the benefit of those living in more healthy surroundings.
So far as the Rhondda miners are concerned, I think the right remedy is that they should be paid a wage appropriate to the place in which they live, and to the circumstances under which they offer their labour to the industry. Unfortunately, owing to the mistaken idea of a national settlement, these local considerations are precluded from having proper weight given to them, but it would be a complete fallacy to suppose that a person who has to incur expenditure in railway travelling is entitled to greater consideration in this respect than a man who has to maintain an expensive house in the country or in the city. Some people would like to live near the Houses of Parliament, but they cannot afford it. Some people might think it desirable to live near St. James's Park, but some of us have to be content to live in less attractive and cheaper parts. Why should we be given an allowance in respect of our travelling expenses because we cannot, live in an expensive house near St. James's Park? However well-intentioned this Amendment may be, I am sure it would produce an intolerable anomaly in the Income Tax law.

9.0 P.M.

Mr. WATERSON: I hope the Committee will not be led away by the illustration put forward by the last speaker. The Clause itself deals with weekly-wage earners. The hon. Member for Central Bristol (Mr. Inskip) would have us believe that there are wage-earners earning wages sufficiently high to allow them to live in the vicinity of St. James's Park, but such an argument is too ridiculous for words. The Solicitor-General has some sympathy with us, but his sympathy is very much like mustard without beef to the hungry man. We require some more practical sympathy. In the course of his remarks the Solicitor-General said that there must be a point of time when these War concessions should cease, and I entirely agree with him. I want to submit
very sincerely that there could not be a more inappropriate moment to dispense with this War concession than the present time.
The difficulty as far as housing is concerned has been put by one or two other speakers. I want to draw attention to the fact that, besides travelling from day to day to their employment, there are many people who travel day after day into the various cities and towns trying to get employment, paying travelling expenses, and finding nothing to do, and they go home and come again very often the following day. They have to keep coming in order to see whether there is any employment for them. It appears to be nothing to the Solicitor-General that railway rates 'are still as high as ever they were. On the other hand, what have working men been experiencing? There has been a constant demand that if we are to stimulate trade and economise the only thing to be done is to cut down the wages of the working classes, and the result has been that wages have been decreased on every hand. The wages of some workers have gone dawn considerably and their travelling expenses have not, decreased one iota. This is an increased burden on these people, and I want the Solicitor-General to view the matter in that light and give to these people some concession, thus removing a hardship which they are experiencing in this connection.

Mr. KIDD: I want to deal with this question from quite another point of view. Supposing these workmen do not pay their own fares and the company provide the travelling facilities. It can hardly be argued that the company in that case is debarred from charging that to the general account for carrying on the business, and thereby reducing the balance which ultimately pays Income Tax. What difference does it make whether the tax is deducted from the earnings of the worker or from the profits of the company? I quite recognise the difficulty of the Solicitor-General, but I think, if he would view the matter from the point of view I have suggested, he would be bound to admit that the cost of conveying these workmen would be a legitimate charge on the cost of running the concern, and therefore it would be deducted from the amount on which Income Tax is payable to the Government. Surely that is exactly equivalent to the tax being remitted as against the
worker. I recognise the difficulty of establishing any general rule. What I suggest is this, that under the Income Tax Act a fairly wide discretion is left to the officials to assess each case according to its merits, and where there are really bonâ fide grounds for a man having to travel some distance to his work, and where there is no responsibility on the part of the employer to find accommodation for the man near his work, then I submit the remission of the tax on the travelling costs of the man would be perfectly legitimate. I hope, before the Committee stage on this Bill is reached, the hon. and learned Gentleman will consider whether some such discretionary power cannot be given.

Mr. T. SHAW: May I offer something in the nature of a reply to the suggestion made by the hon. and learned Member for Central Bristol (Mr. Inskip). Surely if a private firm for its own benefit were sending out men to work on a job and the railway fares of those men were paid by the firm the sum so paid would go on to the wages sheet and no Income Tax would be charged upon it in any way. I see no difference between that and the workmen themselves who receive no income at all being relieved of the tax. I want to call the attention of the Committee to the fact that the workmen never really receive this income. Can it make any difference to the State whether it be the employer who charges the fares on his wages sheet and does not pay Income Tax upon them or whether the worker himself is relieved of the burden of paying Income Tax on his travelling expenses. In the wildest estimate that I can make by the use of pencil and paper, I can scarcely get beyond an average charge of 10s. per week for railway fares. That for 52 weeks in the year represents a total of £26, and a 3s. Income Tax on that, 3s. being the usual amount paid by workmen, produces the magnificent sum of £3 I6s., a sum no doubt of considerable importance to the poor worker, but quite inadequate to enable him to go out on the Mendip Hills to live there by taking advantage of rebate he gets from his Income Tax. There ought to be some perspective and some reason in the arguments put forward, and to talk of men being enabled to live on the Mendip Hills out of their savings from Income Tax is surely drawing the long
bow in a way the hon. and learned Member for Central Bristol very seldom does. I want to appeal to the Government to accept this Amendment for still another reason. Not only does the workman never receive this sum as income which we claim he ought to have deducted from his Income Tax, but the mere fact that he must live away from his work makes him spend more time every day in travelling to his work. A man who can get a home near the place where he works, is far better off than the man who lives farther away and who not only has to pay Income Tax, but has to spend his own time in travelling to and fro. From the point of view of equity, justice and elementary fairness, I appeal to the Solicitor-General to accept this Amendment.

Mr. R. McLAREN: I am much disappointed at the attitude taken up by the Solicitor-General. There is a good deal to be said for the Amendment as far as miners and iron workers are concerned. In my own district we have men who travel a considerable distance to work for two reasons. In the first place they desire to have the benefit of living in a town and of the use of the educational facilities therein provided. The other reason is that at the collieries where they are employed there are no houses to be had, and they are therefore forced to go into the towns to live. The sum paid by a man for travelling to and from his work is really a deduction from his wages. There is no doubt about that. In cases with which I am acquainted, in Lanark for instance, men have to travel a considerable distance by train and it costs them a good sum every year in that case. The sum ought to be charged in such a way as not to be subject to Income Tax. One hon. Member just now spoke of the cases of men who travelled to and from their work at the expense of their employers. I would like to bring to the attention of the Solicitor-General the case of painters and other tradesmen, men who have to go a distance into the country to do work and who are taken there by motor cars, the cost of which is charged against the employer and is not liable to Income Tax at all. What is the difference between an owner taking the men to their work and the man himself paying the fares to his work. I know that in some cases men do not desire to live near the collieries,
because they prefer the comforts afforded by towns. Surely, however, when men have to travel for a long distance, something might he done by way of an allowance, not, perhaps, to the extent of all that they pay but to a certain extent, in connection with Income Tax. After all, it is only fair that a man who has to pay for getting to and from his work, because he cannot get a house there or for other reasons over which he has no control, should have an allowance made to him on his Income Tax. Therefore, I appeal to the Government, while they may not be prepared to accept the Amendment on the Paper, to bring in on Report a Clause providing for some modification in the case of these men who are certainly compelled to pay more than they ought for getting to and from their work.

Sir F. BANBURY: I trust that the Government will not accept this Amendment. What are the real facts in connection with it? A man lives some distance from his work—I understand that the hon. Gentleman was alluding to men who live permanently at some distance from their work—either because he gets his house cheaper, or because it suits him better for some other reason. In these circumstances, why on earth should he be excused from paying Income Tax? It has been mentioned that there are many cases in which the employer pays the workman's travelling expenses, and no doubt that is the case; and, as has been pointed out by the hon. Member for North Lanark (Mr. R. McLaren), this will relieve the employer of paying the workman's expenses. It is desired to shift that on to the Exchequer. As an Income Tax Commissioner I have had some experience of the working of the Income Tax Acts. In many cases people say that their income is so-and-so, but the surveyor says that it is a considerably larger amount, and I, as a Commissioner, have asked how these two statements are reconciled. "Oh," they say, "the surveyor is quite right, but we have deducted the cost of living before we think we ought to pay tax." This is not an isolated case. It has come before me, during the last six months, at least seven or eight times. With this idea prevailing, nothing could be more mistaken than to begin to introduce something which will enable a man to say, "My travelling expenses are free of tax; why should not
my tailor's bill also be free? It is just as necessary for my work that I should wear clothes, and, therefore, the cost of clothes ought to be deducted." There is no greater mistake than to make all these concessions. Over and over again people come to me and say it is unfair that they have not been included in the exemption. You not only do no good, but you create a spirit of grievance. If Jones has been exempted, and Smith, because he does not live so far from his work—though he may pay 2s. or 3s. a week more for his house—is not exempted, he has a grievance. Therefore, I trust that my hon. and learned Friend will adhere to the proposal in the Bill.

Mr. ADAMSON: The right hon. Baronet who has just sat down has told us that he has had considerable experience of the working of the Income Tax Acts.

Sir F. BANBURY: Some experience.

Mr. ADAMSON: I fear that he will require to get a little more experience still, because he has entirely missed the point raised by my hon. Friend, even having regard to his own experience. The right hon. Baronet, as everyone knows, is interested in railway companies. Railway companies carry their men every day many miles from their homes for the purposes of their work. These men are carried free. The railway company pay whatever cost is incurred thereby, and the railway company are not charged Income Tax on the cost of carrying those workmen.

Sir F. BANBURY: The railway company do not carry them to and from their work if they live at a distance from their work. All that the company do is this: If they want to send a man, say, from King's Cross to Peterborough, or to bring him back, they do so, but they do not carry him to and from his own house.

Mr. ADAMSON: The railway companies convey hundreds of men every day to and from particular points for the purpose of their work, and they do not charge them for travelling. My point is that the cost of that to the railway company escapes Income Tax, whereas the individual workman who has to travel 20 or 30 miles in the Rhondda Valley or elsewhere—because this is a matter that affects workmen all over the country—the individual workman who has to travel 5, 10 or 20 miles to his
work has to pay his fare, and he is charged Income Tax on the money that he has paid. That is an unfair position in which to place the workman. On the broad general ground of justice, the Chancellor of the Exchequer and the hon. and learned Gentleman who is assisting him in the conduct of this Bill ought to accept this Amendment. It will simply be placing a section of the workmen of this country in the same position as their fellow-workers. There are men living near their work who have not to bear this burden. It is placed upon those who have to bear it, because of the fact that they cannot get housing accommodation near their work. There is also another large section of the workmen of this country who have their travelling expenses paid. That means that the section with which this Amendment deals are placed in an unfair and unjust position as compared with their fellows, and that ought to be remedied. The Chancellor of the Exchequer can very easily remedy it. It would not cost a very large sum. I know that the Chancellor, under the conditions which surround us for the time being, has no very large balance upon which he can draw. He has, however, a sufficiently large balance to enable him to give to the section of the workers who are covered by the Amendment this measure of justice. It is purely and simply a measure of justice for which we are asking, and it is something which the Chancellor of the Exchequer ought to give and is able to give.

Sir L. SCOTT: I think the Committee would like me to say just a word in reply. Take the case of London. There are a vast number of men in London who have to travel backward and forward every day to their work. Some of those men are engaged in manual labour. To those men, and to those men only, this Amendment will apply.

Mr. MILLS: Oh, no!

Sir L. SCOTT: Yes. It is an Amendment of the rule of the Income Tax Act, which is limited to weekly wage-earners employed by way of manual labour only. There are, in addition to those men who travel backward and forward to their work in London from the suburbs, or wherever they live, a vast number of clerks who do not earn one penny more
in the week or the year than many of the manual workers. Not one of those men would get the benefit of this Amendment.

Mr. T. SHAW: Then it is wrong to tax them.

Sir L. SCOTT: What would be more invidious than that there should be two men sitting side by side in the same train, a manual worker and a clerk, and that one of them should have this exception and the other should not? To give the advantage of the Amendment to the manual worker alone would cost £250,000. To extend it to all those who earn similar incomes, but not by way of manual labour, would add enormously to the cost of the Amendment. If you gave it to, those people, you would at once get a claim from the next grade higher to get the benefit of the Amendment also. Then we should all get it, and the general result of our all getting it would be that something extra on the Income Tax would have to be imposed all round.
The, truth of the matter is that the position of apparent, hardship in cases such as have been mentioned is met by the system of the Income Tax Acts having a graduated scale of payment and extra allowances in exemptions at the lower end of the scale. Most of the workers in regard to whom the Amendment is urged are men who would be in the neighbourhood of the lowest rates of those who have to pay tax at all. They would be on the 2s. 6d. rate, and many of them would have very large exemptions, and would have to make very small payments in consequence. All that can be done in taxation is to treat everybody alike. There must be some cases of hardship, and I assure the Committee that this Amendment is one which will be utterly impossible to work in practice, even with fairness to those who apparently come within it.

Mr. MILLS: I do not feel that we can allow such an interpretation of this Amendment to go by without some sort of protest. I have yet to learn that it is possible to read into it any such meaning as the Solicitor-General seems to imply; because a wage-earner is a wage-earner, whether he is fighting for it at a dock gate or on a daily job one day in 10, or whether he is drawing what you are pleased to call a salary. If it can
be proved in legal phraseology that this Amendment has that limiting power and effect, then I am quite certain it is foreign to the intention of all those who have it at heart. After all, we on this side of the Committee and hon. Member's on the other side have our differing opinions as to who should pay the burden of' taxation. We will be perfectly frank about it, and say that the struggle is unceasing and will he ceaseless until the cost is borne by those best able to shoulder it. Until the time when Income Tax is paid by those best able to bear it, we shall press this Amendment continuously until we get some kind of consideration. I have received dozens of letters from men who are paying many shillings a week more than the ordinary worker mentioned in order to keep up an appearance, although the Solicitor-

General suggests that they are not the type of worker we have in mind. These men are paying something like 8s. 6d. a week to the railway companies out of their earnings, yet they are not allowed one penny more in the way of reduction in Income Tax. Whether or not the Solicitor-General reads the Amendment in this way, that certainly is not the intention of those hon. Members who support it. If his contention is proved to be right, then, at some stage or other, we shall have to make clear, by some other Amendment, what is the intention and effect of the proposal mow before the Committee.

Question put, "That those words be there inserted."

The Committee divided: Ayes, 96; Noes, 243.

Division No. 159.]
AYES
[9.34 p.m.


Acland, Rt. Hon. Francis D.
Guest, J. (York, W. R., Hemsworth)
Raffan, Peter Wilson


Adamson, Rt. Hon. William
Hall, F. (York, W.R., Normanton)
Rendall, Athelstan


Ammon, Charles George
Halls, Walter
Richardson, R. (Houghton-le-Spring)


Banton, George
Hartshorn, Vernon
Roberts, Frederick O. (W. Bromwich)


Barker, G. (Monmouth, Abertillery)
Heyday, Arthur
Robertson, John


Barnes, Major H. (Newcastle, E.)
Hayward, Evan
Rose, Frank H.


Barton, Sir William (Oldham)
Henderson, Rt. Hon. A. (Widnes)
Royce, William Stapleton


Bell, James (Lancaster, Ormskirk)
Hirst, G. H.
Sexton, James


Benn, Captain Wedgwood (Leith)
Hodge, Rt. Hon. John
Shaw, Thomas (Preston)


Bowerman, Rt. Hon. Charles W.
Hogge, James Myles
Short, Alfred (Wednesbury)


Bramsdon, Sir Thomas
Holmes, J. Stanley
Stich, Charles H.


Briant, Frank
Irving, Dan
Spencer, George A.


Bromfield, William
John, William (Rhondda, West)
Spoor, B. G.


Brown, James (Ayr and Bute)
Johnstone, Joseph
Sutton, John Edward


Cairns, John
Jones, J. J. (West Ham. Silvertown)
Swan, J. E.


Cape, Thomas
Jones, Morgan (Caerphilly)
Thomas, Rt. Hon. James H. (Derby)


Carter, W, (Nottingham, Mansfield)
Kennedy, Thomas
Thomson, T. (Middlesbrough, West)


Clynes, Rt. Hon. John R.
Kiley, James Daniel
Thorne, G. R. (Wolverhampton, E.)


Cowan, D. M. (Scottish Universities)
Lawson, John James
Thorne, W. (West Ham, Plaistow)


Davies, A. (Lancaster, Ciltheroe)
Lunn, William
Walsh, Stephen (Lancaster, Ince)


Davies, Alfred Thomas (Lincoln)
McLaren, Robert (Lanark, Northern)
Waterson A. E.


Davies, Rhys John (Westhoughton)
Maclean, Neil (Glasgow, Govan)
Watts-Morgan, Lieut.-Col. D.


Davison, J. E. (Smethwick)
Maclean, Rt. Hn. Sir D. (Midlothian)
Wedgwood, Colonel Josiah C.


Edwards, C. (Monmouth, Bedwelity)
MacVeagh, Jeremiah
White, Charles F. (Derby, Western)


Edwards, Hugh (Glam., Neath)
Mills, John Edmund
Wignall, James


Entwistle, Major C. F.
Murray, Hon. A. C. (Aberdeen)
Williams, Col. P. (Middlesbrough, E.)


Finney, Samuel
Murray, Dr. D. (Inverness and Ross)
Wilson, James (Dudley)


Foot, Isaac
Myers, Thomas
Wood, Major M. M. (Aberdeen, C.)


Galbraith, Samuel
Naylor, Thomas Ellis
Young, Robert (Lancaster, Newton)


Gillis, William
Newbould, Alfred Ernest



Graham, D. M. (Lanark, Hamilton)
O'Grady, Captain James
TELLERS FOR THE AYES.—


Graham, R. (Nelson and Colne)
Parkinson, John Allen (Wigan)
Mr. Walter Smith and Mr. T.


Graham, W. (Edinburgh, Central)
Poison, Sir Thomas A.
Griffiths.


Grundy, T. W.




NOES.


Adkins, Sir William Ryland Dent
Barnston, Major Harry
Bridgeman, Rt. Hon. William Clive


Agg-Gardner, Sir James Tynte
Barrand, A. R.
Briggs, Harold


Amery, Rt. Hon. Leopold C. M. S.
Barrie, Sir Charles Coupar (Banff)
Broad, Thomas Tucker


Armitage, Robert
Bartley-Denniss, Sir Edmund Robert
Brown, Brig.-Gen. H. C. (Newbury)


Armstrong, Henry Bruce
Beckett, Hon. Gervase
Buckley, Lieut.-Colonel A.


Astbury, Lieut.-Com. Frederick W.
Bell, Lieut.-Col. W. C. H. (Devizes)
Bull, Rt. Hon. Sir William James


Atkey, A R.
Bellairs, Commander Carlyon W.
Campion, Lieut.-Colonel W. R.


Baird, Sir John Lawrence
Bigland, Alfred
Carr, W. Theodore


Baldwin, Rt. Hon. Stanley
Birchall, J. Dearman
Casey, T. W.


Balfour, George (Hampstead)
Bird, Sir William B. M. (Chichester)
Chamberlain, Rt. Hn. J. A. (Birm, W.)


Banbury, Rt. Hon. Sir Frederick G.
Blake, Sir Francis Douglas
Chamberlain, N. (Birm., Ladywood)


Banner, Sir John S. Harmood-
Borwick, Major G. O.
Cheyne, Sir William Watson


Barlow, Sir Montague
Bowles, Colonel H. F.
Churchman, Sir Arthur


Barnes, Rt. Hon. G. (Glas., Gorbals)
Bowyer, Captain G. W. E.
Clough, Sir Robert


Barnett, Major Richard W.
Breese, Major Charles E.
Coats, Sir Stuart


Cobb, Sir Cyril
Hunter-Weston, Lt.-Gen. Sir Aylmer
Reid, D. D.


Cohen, Major J. Brunel
Hurd, Percy A.
Remer, J. R.


Colfox, Major Wm. Phillips
Hurst, Lieut.-Colonel Gerald B.
Remnant, Sir James


Colvin, Brig.-General Richard Beale
Inskip, Thomas Walker H.
Richardson, Sir Alex. (Gravesend)


Conway, Sir W. Martin
Jackson, Lieut.-Colonel Hon. F. S.
Richardson, Lt.-Col. Sir P. (Chertsey)


Cope, Major William
James, Lieut.-Colonel Hon. Cuthbert
Roberts, Rt. Hon. G. H. (Norwich)


Cowan, Sir H. (Aberdeen and Kinc.)
Jephcott, A. R.
Roberts, Sir S. (Sheffield, Ecclesall)


Craik, Rt. Hon. Sir Henry
Johnson, Sir Stanley
Robinson, S. (Brecon and Radnor)


Dalziel, Sir D. (Lambeth, Brixton)
Jones, Sir Evan (Pembroke)
Robinson, Sir T. (Lancs., Stretford)


Davies, David (Montgomery)
Jones, G. W. H. (Stoke Newington)
Rodger, A. K.


Davies, Thomas (Cirencester)
Jones, Henry Haydn (Merloneth)
Rutherford, Sir W. W. (Edge Hill)


Davies, Sir William H. (Bristol, S.)
Joynson-Hicks, Sir William
Samuel, A. M. (Surrey, Farnham)


Dawson, Sir Philip
Kellaway, Rt. Hon. Fredk. George
Samuel, Samuel (Vedsworth, Putney)


Dewhurst, Lieut.-Commander Harry
Kelley, Major Fred (Rotherham)
Sanders, Colonel Sir Robert Arthur


Doyle, N. Grattan
King, Captain Henry Douglas
Sassoon, Sir Philip Albert Gastave D


Edge, Captain Sir William
Lane-Fox, G. R.
Scott, A. M. (Glasgow, Bridgeton)


Ednam, Viscount
Larmor, Sir Joseph
Scott, Sir Leslie (Liverp'l, Exchange)


Edwards, Allen C. (East Ham, S.)
Law, Alfred J. (Rochdale)
Seddon, J. A.


Elveden, Viscount
Leigh, Sir John (Clapham)
Shaw, William T. (Forfar)


Erskine, James Malcolm Monteith
Lewis, Rt. Hon. J. H. (Univ., Wales)
Shortt, Rt. Hon. E. (N'castle-on-T.)


Evans, Ernest
Lister, Sir R. Ashton
Simm, M. T.


Falcon, Captain Michael
Lloyd, George Butler
Smith, Sir Allan M. (Croydon, South)


Falle, Major Sir Bertram Godfray
Locker-Lampson, Com. O. (H'tingd'n)
Smith, Sir Harold (Warrington)


Farquharson, Major A. C.
Lorden, John William
Sprot, Colonel Sir Alexander


Fell, Sir Arthur
M'Connell, Thomas Edward
Stanley, Major Hon. G. (Preston)


FitzRoy, Captain Hon. Edward A.
Mackinder, Sir H. J. (Camiachle)
Stanton, Charles Butt


Ford, Patrick Johnston
Macleod, J. Mackintosh
Steel, Major S. Strang


Foreman, Sir Henry
Macnaghten, Sir Malcolm
Stephenson, Lieut.-Colonel H. K.


Forestier-Walker, L.
McNeill, Ronald (Kent, Canterbury)
Stewart, Gershom


Forrest, Walter
Macpherson, Rt. Hon. James I.
Sturrock, J. Leng


Fraser, Major Sir Keith
Macqulsten, F. A.
Sugden, W. H.


Frece, Sir Walter de
Magnus, Sir Philip
Surtees, Brigadier-General H. C.


Fremantle, Lieut.-Colonel Francis E.
Mallalieu, Frederick William
Sutherland, Sir William


Ganzoni, Sir John
Middlebrook, Sir William
Taylor, J.


Gee, Captain Robert
Moison, Major John Elsdale
Terrell, George (Wilts, Chippenham)


Gibbs, Colonel George Abraham
Morden, Col. W. Grant
Thomson, F. C. (Aberdeen, South)


Gilmour, Lieut.-Colonel Sir John
Moreing, Captain Algernon H.
Thomson, Sir W Mitchell (Maryhill)


Glyn, Major Ralph
Morrison, Hugh
Townley, Maximilian G.


Goff, Sir R. Park
Munro, Rt. Hon. Robert
Tryon, Major George Clement


Gould, James C.
Murchison, C. K.
Turton, Edmund Russborough


Gray, Major Ernest (Accrington)
Murray, Rt Hon. C. D. (Edinburgh)
Vickers, Douglas


Green, Joseph F. (Leicester, W.)
Murray, John (Leeds, West)
Waddington, R.


Greenwood, William (Stockport)
Nall, Major Joseph
Wallace, J.


Greer, Sir Harry
Neal, Arthur
Waiters, Rt. Hon. Sir John Tudor


Greig, Colonel Sir James William
Newman, Sir R. H. S. D. L. (Exeter)
Walton, J. (York, W. R., Don Valley)


Gritten, W. G. Howard
Nicholl, Commander Sir Edward
Ward, Col. J. (Stoke-upon-Trent)


Guest, Capt. Rt. Hon. Frederick E.
Nicholson, Reginald (Doncaster)
Ward, Col. L. (Kingston-upon-Hull)


Hacking, Captain Douglas H.
Nield, Sir Herbert
Ward, William Dudley (Southampton)


Hamilton, Sir George C.
Norris, Colonel Sir Henry G.
Warner, Sir T. Courtenay T.


Hannon, Patrick Joseph Henry
Norton-Griffiths, Lieut.-Col. Sir John
Warren, Sir Alfred H.


Harmsworth, C. B. (Bedford, Luton)
Oman, Sir Charles William C.
Watson. Captain John Bertrand


Harmsworth, Hon. E. C. (Kent)
Ormsby-Gore, Hon. William
Wheler, Col. Granville C. H.


Harris, Sir Henry Percy
Parker, James
White, Col. G. D. (Southport)


Henderson, Lt.-Col. V. L. (Tradeston)
Parry, Lieut.-Colonel Thomas Henry
Wild, Sir Ernest Edward


Hennessy, Major J. R. G.
Pearce, Sir William
Williams, C. (Tavistock)


Herbert, Dennis (Hertford, Watford)
Pease, Rt. Hon. Herbert Pike
Wills, Lt.-Col. Sir Gilbert Alan H.


Hickman, Brig.-General Thomas E.
Peel, Col. Hon. S. (Uxbridge, Mddx.)
Windsor, Viscount


Wider, Lieut.-Colonel Frank
Perkins, Walter Frank
Winfrey, Sir Richard


Hinds, John
Perring, William George
Wise, Frederick


Hohler, Gerald Fitzroy
Pickering, Colonel Emil W.
Wood, Sir J. (Stalybridge & Hyde)


Holbrook, Sir Arthur Richard
Pollock, Rt. Hon. Sir Ernest Murray
Woolcock, William James U.


Hope, Sir H. (Stirling & Crckm'nn, W)
Purchase, H. G.
Worsfold, T. Cafo


Hope, Lt.-Col. Sir J. A. (Midlothian)
Rae, Sir Henry N.
Young, Sir Frederick W. (Swindon)


Hope, J. D. (Berwick & Haddington)
Raeburn, Sir William H.



Hopkins, John W. W.
Handles, Sir John Scurrah
TELLERS FOR THE NOES.—


Hopkinson, A. (Lancaster, Mossley)
Rankin, Captain James Stuart
Colonel Leslie Wilson and Mr.


Horne, Edgar (Surrey, Guildford)
Ratcliffe, Henry Butler
McCurdy.


Horne, Sir R. S. (Glasgow, Hillhead)
Rawlinson, John Frederick Peel

Mr. W. GRAHAM: I beg to move to leave out Sub-section (3).
The subject of this Amendment is, unfortunately, a little dull and technical, but I think the Solicitor-General will agree that it raises a point of very great importance. The Clause makes a very important change in Income Tax practice, in that it transfers to Schedule E, the old Schedule for salaries and the emoluments of public offices, a very large
number of salaries and profits which were formerly assessed under Schedule D. That is, of course, in keeping with the recommendation of the Royal Commission on Income Tax, and to that general proposal we take no exception at the present stage. But in this Clause, and particularly in Sub-section (3), it is provided that Rule 7 of the Rules applicable to Schedule E, which relates to taxes in respect of offices and employments of profit held under a railway company,
shall apply to all offices and employments held under and pensions paid by a railway company. The precise Rule to which the Section refers is very short. It is provided under Rule 7 of Schedule E, in the Act of 1918 that
The tax in respect of offices and employments of profit held under a railway company shall be charged by the special commissioners, who shall notify to the Secretary or other officer of the company the particulars of the assessments.
The second point provides that
Any such assessment shall be deemed to be and shall be an assessment upon the company and the tax in respect thereof shall be paid, collected and levied accordingly, and the company or the secretary or other officer may deduct out of the emoluments of the holder of any such office or employment of profit the tax so charged.
The difficult position which is raised by this proposal is comparatively simple. Hitherto the salaried officials of railway companies in this country have been charged under Schedule E. That has been the subject of a very important case which was decided by the House of Lords recently, and which it would only be relevant to discuss on a subsequent Amendment. The point I am putting to the Chancellor of the Exchequer at this stage is this: Why should it be necessary to put this Sub-section in the Finance Act of the present year, continuing this exceptional system—for it is an exceptional system—in the method of imposing Income Tax, and collecting Income Tax from the officials of the railway companies. There are only one or two similar cases in the country, but there is no doubt that this method of imposing and collecting the tax has led to a very great deal of irritation and ill-feeling among the railway clerical staffs. There was a recent experience in the case of the Caledonian Railway Company, in which, in 26 cases, the company owed men a total of £133. I agree that they were not very large sums in each case, but they were important to the men in respect of excessive deductions, and it was only after very great delay that these sums could be recovered. I would cite here the case of other railway companies in which similar experience has been found.
I do not in any way blame the railway companies for this difficulty. I am prepared to blame the system under which this tax is imposed and collected. I suggest to the Chancellor of the Exchequer that now that he is making this
very wide transfer of classes of people who were formerly assessed and taxed under Schedule D to Schedule E, that there is no longer any case for the exceptional treatment of one or two large concerns in this country, by means of which the tax is imposed and collected by railway companies in this way. The Solicitor-General will appreciate that I am not making an attack upon collection at the source—there may be some' other method of providing for that—but I am attacking in this Section the method employed in the case of railway companies, and one or two other cases, and I suggest that, as a great change is taking place, in keeping with the recommendations of the Royal Commission on the Income Tax, that the time has come when we should not repeat this Subsection in the present Bill, but should allow it to lapse.

Sir L. SCOTT: As the hon. Member has said, this is an extraordinarily technical point, but I understand that his Amendment is intended for the moment to limit it to the one question, namely, whether or not, as is proposed by Clause 12 (3), the railway companies should be the medium for collecting this tax. The answer on that point is that at the present time, and for a great many years past, the railway companies have been the medium for collecting the tax from, at any rate, certain of their employés. The recent case in the House of Lords has thrown the system that has been in use for half a century or more into confusion by a decision that certain employés who were supposed, and had been supposed through all these years, to come within the definition of Schedule E, really came under Schedule D. The main object of Clause 12 is to put that confusion right, and in regard to that I understand that the hon. Member makes no complaint. That being so, the position is, as regards the railway companies' employés, and the Clause which puts such employés under Schedule E, we have the position that some of these employés are already taxed through the railway company, under the existing practice, which has worked very well, and for the sake of simplicity it was thought much the best, in the interests of everybody, that the whole of the employés should be treated in the same way as some employés. Consequently, Clause 12
(3) provides that the existing practice of collection through the railway companies should apply to all. We believe there is no objection on the part of the railway companies to this method of collection of the tax at the source. It seems to be a means by which the Treasury can be saved a very considerable amount of expense, and, it being a cheap and simple way of doing it, I submit that it would be a great mistake to go back upon the practice which has existed and worked well for a very large number of years, particularly when that practice is one which saves money to the Exchequer.

Amendment negatived.

Mr. W. GRAHAM: I beg to move, at the end of Sub-section (6), to insert the words
but these provisions shall not apply to assessments in respect of offices and employments (other than offices and employments of profit) held under, and pensions paid by, a railway company, for the years ending the fifth day of April, nineteen hundred and nineteen, nineteen hundred and twenty, nineteen hundred and twenty-one, and nineteen hundred and twenty-two, and readjustments and repayments in respect of such assessments for those years may be made on the basis of Income Tax having been chargeable under Schedule D, notwithstanding that such assessments would, but for this provision, have become final and conclusive.
I will not detain the Committee with any long argument, because the Solicitor-General has referred to the case which gives rise to this Amendment. The case was brought a considerable time ago by the Great Western Railway Company. The important point is that it was brought by the railway company and not by the employé, the clerk, who was involved. They raised an action in which they contended that a clerk at Swindon was entitled to be assessed, not under Schedule E, which was the practice enforced by the Inland Revenue authorities, but under Schedule D. The litigation lasted for about three years, and in March last the House of Lords decided, one judge dissenting, that the clerk in question was entitled to be assessed under Schedule D, and that he had been wrongly assessed under Schedule E.
It is perfectly plain that that raises a question, as the Solicitor-General has suggested, of very great importance. The point as regards Schedule E was that this was employment in a public capacity.
The learned Judges argued that it was not public any more than any other employment which might be followed by a clerk in a hundred and one pursuits. So that contention went by the board. It was clear then that, on the ground of being public employment or in some public service, the clerk did not come within Schedule E. That was, I think, an overriding consideration. But it led to certain important results for the clerk and all the other thousands of railway clerks in this country. It indicated that the Inland Revenue authorities had been wrong in assessing the clerk under Schedule E. Under Schedule E he was denied the right to the three years' average, which was applicable under Schedule D, because there was only a one year's basis so far as Schedule E was concerned.
10.0 P.M.
Immediately after the decision was reached the railway clerks applied to the Inland Revenue authorities to get the tax made on the average of the preceding three years, to which they were entitled under the decision. They were met by the reply on the part of the Inland Revenue authorities that that request could not be entertained, that the case applied to the one man, Hall, in respect of whom the action was brought. The reply to that is that the ease of Hall was obviously a test case, and that, if the Inland Revenue was wrong in the case of Hall, it was wrong in the case of the whole class of railway clerks, who were in exactly the same position and were entitled to take the benefit of any advantage which Hall got by reason of the decision reached in the House of Lords. The statement was made that, if Hall made a claim for the benefit of the three years' average, he would be entitled to it, but that in all the other cases the other clerks were to be denied the right which this one clerk obtained, simply because the action had been brought in his name. I have seen part of the correspondence, and I have no doubt that the case has been stated by me with substantial accuracy. I am simply asking in this Amendment that effect shall be given to the decision of the House of Lords as regards all these other thousands of railway clerks. That is, that the law as it was in reality throughout, if the House of Lords' position is accepted, as it must be, should be now applied, no doubt at a distance of some years. It is an Amendment under which we are
simply seeking to do justice to railway clerics, from whom justice was withheld by a misunderstanding on the part of the Inland Revenue authorities. I am not making any request as regards the future. We agree to Schedule E and the one-year basis for the future, but the Solicitor-General must admit that it is very wrong to deny to all these thousands of clerks the concession which will be open to Hall by reason of the decision of the House of Lords.

Mr. DENNIS HERBERT: I am going to apeal to the Solicitor-General to see if he cannot consent to this particular Amendment. So far as money is concerned, I think that there is very little involved. It is confined, as the hon. Member for Central Edinburgh (Mr. W. Graham) has said, simply to the time up to the present and does not extend to the future. But my objection to the Clause as it stands is that it is to some extent retrospective taxation. My hon. Friend was right in what he said about the case which was heard by the House of Lords. They decided that certain employés were taxable upon the three years' average. It had generally, I believe, been supposed to be the opposite. Now the House of Lords gives this decision and down come the Government and say, "Notwithstanding the decision of the House of Lords, the law shall be held to be something different from that decision and this provision shall cover the last three years."

Mr. HOHLER: Where do you find it?

Mr. HERBERT: The point was really covered by Sub-section (6) and Sub-section (3), which has already been dealt with, but my hon. Friend does not propose to leave out Sub-section (3) but to modify it by Sub-section (6) so far as to preserve the rights which are covered by a decision of the House of Lords by allowing them the benefit of the average on the past three years. There can be very little money involved in that, and the Government will be doing an act of justice at a very small cost if they refrain from the very objectionable principle which they adopted last year, and which I opposed at the time in another matter, in their Budget, of trying by legislation to say that what they intended should have been the law in the past and which was not the law should be the law. That is nothing more or less than retrospective
taxation. I hope that the Government may see their way to accept this particular Amendment.

Sir L. SCOTT: The hon. Member for Central Edinburgh (Mr. W. Graham) and the hon. Member for Watford (Mr. D. Herbert) have delivered very interesting speeches, but they do not in the least adequately represent the existing position. It is true that the decision of the House of Lords was stated by the hon. Member for Central Edinburgh in a speech that might have been made by a member of my profession, having regard to its accuracy. It is true that the House of Lords did say that these men who had been taxed under Schedule E ought to have been taxed under Schedule D. The House of Lords said that in the middle of last March, which is three months ago. Down to that date this House certainly, the Treasury and Inland Revenue certainly, and the great bulk of lawyers also, thought that the employés of companies were properly taxed under Schedule E. The House of Lords held that the word "public" in Schedule E was an over-riding word, and for that reason said that these employés could not come within Schedule E, which deals with public employés or employés of a company of a public character. But the fact is that all these assessments have been made during the past year, and the taxes paid by all these men under Schedule E.

Mr. W. GRAHAM: And also under protest.

Sir L. SCOTT: I do not think there have been any exceptional protests. For the space of a month or two, till the full statement was made by the Chancellor of the Exchequer, the position was an interregnum between the period during which everybody thought that Schedule E was the right Schedule and the intimation by the Chancellor of the Exchequer, which was really in accordance with what was an implied suggestion in the judgment of the House of Lords—that legislation should be, introduced to regularise a position which it was believed always had existed until the House of Lords gave judgment in March last. The Amendment now proposes that all the assessments made during the last three years should be ripped up, that in all these cases new assessments should be made, and that in a vast number of cases
enormous trouble should be taken. Under existing circumstances, from the common-sense point of view and not from the legal point of view, is it reasonable to rip up all these assessments? It would mean vast expenditure and vast trouble. And for what? In order that a number of individuals should be put on a basis on which this House during the time that they were taxed did not think they were entitled to be put, on which the general public did not think they were entitled to be put, and very few people thought they were entitled to be put. There is no ground of ordinary fairness or equity why it should be done.
What is the proposal? It is that the employés of certain companies, to wit, railway companies, should have this done for them, not that the employés of all other companies to which the House of Lords decision applied should have it done. Why should railway employés be put in a privileged position? Lastly, the difference in the aggregate is not very much. Under Schedule D the tax is paid on the average of three years; under Schedule E it is paid upon the income of the preceding year, except in the case of manual workers, who pay on the actual earnings of the year of assessment. In the aggregate there is not a very great difference. Under the circumstances the proposal is one that ought not to be accepted.

Mr. AMMON: After the statement of the learned Solicitor-General, I think my hon. Friend the Member for Central Edinburgh (Mr. W. Graham) might reflect upon the compliment paid to him. Reference has been made to the difference between the legal point of view and the common-sense point of view. The action having been entered by the railway company indicated, I understand, that the case was to be a test case. The point at issue was that these clerks have been overcharged for a certain number of years. Surely, if judgment is given on that point and the taxing authorities are held to be wrong, it must follow that they must refund the money in respect of which judgment was given. The House of Lords sat as a judicial body to try this particular case. It is not a question of the amount of money at stake, but a question of equity, and a question whether or not, for a cer-
tain convenience, the Government can defy the decisions of the Courts of Law. The House, for the sake of maintaining the dignity and prestige of the Courts of Law, surely cannot allow this sort of thing to stop on the statement of the learned Solicitor-General.

Colonel WEDGWOOD: Let us understand what this Clause does. It really increases the Income Tax paid by a large number of salaried people. It substitutes one schedule for another, and, generally, as salaries rise, that means an increase in the Income Tax payable. The Government would not have made the change unless they had expected to get more revenue out of it.

Sir R. HORNE: The case is the contrary.

Colonel WEDGWOOD: Then why not accept the Amendment, reduce the amount of money you expect to lose, and at the same time please those who are concerned?

Sir R. HORNE: The hon. and gallant Gentleman does not understand the character of the Amendment.

Colonel WEDGWOOD: The character of the Amendment, as I understand it, is that these railway clerks have hitherto been assessed for Income Tax under Schedule E.

Sir R. HORNE: The hon and gallant Member does not seem to understand that we lose £500,000 by the introduction of this change. The Amendment does not prevent the change taking place.

Colonel WEDGWOOD: The Amendment prevents the change taking place retrospectively. It gives to the clerks the rights they have obtained in a Court of Law and prevents them from having to pay the increased charges that they might have to pay under Schedule E. To that extent these clerks will benefit by the Amendment. Are they legally entitled to enjoy this benefit? They carried the case through the Courts. Now you are going by the Clause, not only for all future time to assess them under Schedule E, which I hold, would bring more money into the Treasury, but for the last three years the basis of assessment is to be affected.

Sir W. JOYNSON-HICKS: Can the hon. and gallant Member point out which word provides for that?

Colonel WEDGWOOD: In the Amendment? [Hon. MEMLERS "The Clause."]

Sir W. JOYNSON-HICKS: I am simply seeking for information. The hon. and gallant Gentleman says the Clause itself alters the law and makes it retrospective for three years so that these men cannot get their money back. Where in the Clause does he find that statement?

Colonel WEDGWOOD: I cannot say where it is in the Clause, but if the right hon. Baronet had listened to the speech of the Solicitor-General he would understand that such is the intention of the Clause and the effect of it. The effect of it is to reverse the decisions which have been come to by the Courts of Law—to reverse them for the future—and to make the law what the Treasury always held it to be and what the House of Lords found it not to be. That is, I believe, the object of the Clause. It is, by Act of Parliament, trying to defeat the decision of the House of Lords. Observe how differently the Government treat a decision of the House of Lords when it goes in favour of the railway clerks, who are small taxpayers, from the way in which they treated it in the case of the landlords who defeated the intention of the Budget of 1909–10 in the Law Courts. There, the action of the Law Lords was accepted as a permanent defeat of the intentions of Parliament. Here when the Law Courts defeat what the Treasury believed to be the intention of Parliament, in passing the original Act, immediately a Clause is introduced in the next Finance Bill to put the matter right. I do not, mind their putting the matter right in the future, but they need not retrospectively affect the interests of the people who won the case against them in the Lords.

Sir W. JOYNSON-HICKS: I object to my hon. and gallant Friend attempting to give the Clause any meaning which is not justified. I do not think the Mover of the Amendment made out a case that there was anything in Clause 12 which was retrospective for three years. The Clause provides that from the present time these men shall be taxed under Schedule E, and there is nothing retrospective about it. I understand from the decision of the House of Lords that these men can to-day in spite of Clause 12 apply for re-assessment.

Mr. D. HERBERT: Sub-section (6) contains the words
shall be deemed always to have had effect.
That is what makes it retrospective. The hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood) is perfectly correct. The House of Lords decided that for the last three years the law has been something different to what was supposed. This Sub-section now says that the law shall be deemed always to have been something which the House of Lords says it was not.

Sir W. JOYNSON-HICKS: Sub-section (6) says:
The provisions of Sub-section (1) and Sub-section (3) of this Section shall have effect and shall be deemed always to have had effect, for the purpose of any assessment to Income Tax which is made or becomes final and conclusive after the first day of May, nineteen hundred and twenty-two.
I submit that it does not apply to assessments made in 1921, 1920, or 1919. Perhaps the Solicitor-General will tell us whether I am or am not right, and whether this Clause is or is not retrospective?

Mr. HOLMES: I want to ask the Solicitor-General whether it is not a fact that under this Clause assessments under Schedule E, signed by the Commissioners after the 1st May, 1922, and assessments under the appeal or otherwise open for any previous year, which become final and conclusive after the 1st May, 1922, will, in effect, fall to be, determined as if the decision referred to had not been given, and that to that extent assessments will be made on past years?

Sir L. SCOTT: In answer to the hon. Member for Twickenham (Sir W. Joynson-Hicks), I agree with his interpretation of the Clause. Sub-section (6) applies only to assessments which are made or become final after the 1st May. In answer to the hon. Member for Northeast Derbyshire (Mr. Holmes), I think that assessments that were open on 1st May would then become final, and that, therefore, they would be made under the terms of the new law.

Mr. W. GRAHAM: I think the Committee will agree that an important principle has been raised in this Amendment. Unfortunately I am by no means satisfied with the reply which the learned Solicitor-General has given. He suggests
that the effect of this Amendment will be to rip up all the assessments which have been made during the past three years, to lead to great administrative and other difficulties, and probably also to involve a considerable sum of money. In reply to that point, for at least a part of that period, many of the salaries which were paid were very low, and the aggregate numbers involved may not he considerable, but even if they were larger than we have any reason to assume to-night, the fact that the railway companies made these returns under Schedule E on the particular basis laid down in that rule of the Act of 1918 makes the accessibility of these returns very easy and places at the disposal of the Department a mass of information which, I think the Solicitor-General will agree, they do not often get where Income Tax assessments are concerned, so that we must not strain the administrative difficulty in giving effect to this Amendment.
There is another point on that head which I am rather surprised the Solicitor-General should ignore. He refers to our going back over assessments for three years, but he knows perfectly well that this litigation has been going on for three years, and that it was not till about 26th March last that a final decision was given in the House of Lords. So that it was perfectly impossible, of course, for any railway clerk, or for the Inland Revenue authorities, to come to any definite decision. It was only in March last that the decision emerged, and it is only now that we can give effect to this remedy. Important as those considerations are, there is another consideration which, I believe, although I speak with great respect of the law, to be final in this matter. The House of Lords' decision makes it plain beyond a shadow of doubt that this was an erroneous assessment, and that sums were wrongly collected from these people under the assessment. I venture to suggest that nothing can get round that argument, and that we are entitled, even if it be a case of going back three years, to give effect to the position which these men should have occupied all that time, and to put into force the basis of assessment on which the authorities should have proceeded. The learned Solicitor-General has also failed to meet the point I made, namely, that the concession is being withheld from all other
clerks, although this obviously was a test case applying to railway clerks in the country as a whole.
These considerations will compel me to go to a Division on this Amendment. The learned Solicitor-General urges another argument in conclusion. He says: "You are, by your Amendment, proposing to give a preference to one section of employés, namely, the clerical staff of a railway company. Why do you not suggest a similar concession to all other people in this position?" My reply to that is that there may be some small number, but it must be a very small number of people indeed, who are in this position. This litigation, however, was brought in respect of the clerk of a railway company, and in respect of all clerks of railway companies; and, further, the railway company was in an exceptional position under Schedule E of the Act of 1918. There can be no comparison of the employés of a local authority and of the other bodies named in Schedule E to that Act, because they are quite clearly defined. There was a doubt in the case of a railway company, and it took three years of litigation to remove that doubt by a judgment in the House of Lords. So that I think in that reply I have tried to meet the arguments which were put by the learned Solicitor-General, and I cannot understand why he should refuse to give effect to a decision of the highest court in this land, and to give these men a right, of which they should never have been deprived, and, in fact, which they possess in law under the Inland Revenue system of this country.

Sir R. HORNE: I have listened with very great interest to the very moderate speech made by the hon. Member for Central Edinburgh (Mr. W. Graham), and I am sure he and the Committee will accept my assurance that the Government does not want to do anything that could be remotely described as an injustice in a matter of this kind. But I should like the Committee to understand the considerations which moved us upon this matter. The decision of the House of Lords was, undoubtedly, a surprise, not merely to the Treasury officials and the Government, but, I think, to the great bulk of people who knew anything about Income Tax law. The result was that it threw into confusion the whole basis of assessment of employés in this country,
and it was hinted in that judgment of the House of Lords that something was necessary to be done, and it was obvious to the people who had the administration c) the law in their hands that it was necessary to out the whole matter on a proper foundation. We decided, accordingly, not to take advantage of the judgment of the House of Lords, because it would have been an advantage to us at the present time, as a mere matter of money. We decided not to take advantage of the judgment of the House of Lords, but to bring in at once legislation which would have the effect of putting all employés of the country of the character described on the basis of Schedule E instead of Schedule D, so that there would be no further difficulty. We are now in a time of falling salaries. By the process of making this change at the present time we should lose something like half a million in the present year. The hon. Gentleman who moved the Amendment is still supporting what the Government is doing, and this would, as I say, involve us in the present year in the loss of half a million.
But the Committee is asked to address itself specially to the case of the past and not the future. My hon. Friend on the Front Opposition Bench addressed himself to the future, or the future mixed with the past, and I do not think that he disentangled them. But about the past, and about the particular case of these railway servants, what are we to do? In the first place, let me say while I am not at present in active practice as a lawyer, I do not entirely forget my legal training, and I think anybody who tries to consider the judgment of the House of Lords will find it extraordinarily difficult to decide just what class of people that judgment will apply to. There was a vigorous examination of the case of this particular claim, and the particulars relating to the clerk, the particular posts which he had held, the salary which he then had, and say with confidence that you could not so easily, as my hon. Friend seems to think, discriminate between the classes of railway servants or say with any great certainty that the judgment in the case deals with a certain grade, and would apply to that and no other. Nor could you take any group or body of servants, and say that in their case the judgment would
necessarily be followed if the matter was raised. More than that, if you were to apply the judgment in the case of all railway servants, as my hon. Friend suggests, you will equally require—to do justice—to apply it to a great many servants of public companies other than railway companies. You are thus immediately landed in a morass of difficulties.
What about equity? If there had been any great appearance of injury or damage either to individuals or a large class of individuals, we might have found some rough measure of dealing justice in the matter. But what is the situation? It is quite right to say that the Lords pronounced a technical judgment that these were people who had erroneously been assessed under Schedule D instead of Schedule E. What had they been doing? Nobody could say that they were doing other than paying upon the actual amount which they had earned. Therefore, from that point of view, there is no appearance of damage or injury, that is, from the equitable point of view. All we can say is that from the technical point of view, at a. time when salaries were rising, they had not the advantage of reducing their Income Tax by working upon the average which would have produced this result, that at a time when salaries throughout the country were on the increase, they did not get an advantage to which they really and ordinarily would not have been entitled. When salaries began to fall, they were again paying upon the salary of the year so far as the assessment to Income Tax is concerned. I do not think that anybody here will regard that as really a case of real injury which requires exceptional measures to be taken in order to prevent injustice being done. If the matter were an easy one we might, perhaps, have looked at the whole affair with a greater desire to put it right. It is not easy, and there is no very obvious injustice. It is not easy because, in point of fact, what we should require to do would be to rip up the assessment not merely of the railway employés, but of large bodies of other employés in this country back for a period of three years. That is not easy and I doubt very much whether we should derive more justice from that line than the line we have taken. Although I am willing to give further consideration to
this matter, and I have been much impressed by the case put forward by my hon. Friend the Member for Central Edinburgh (Mr. W. Graham), I think upon the face of it this matter is not one upon which we have been neglecting the interests of the parties with whom we have been dealing.

Mr. HOLMES: I do not think the Chancellor of the Exchequer has answered the point which was put by my hon. Friend the Member for Central Edinburgh. I want to put this case on the ground of equity. During the years 1920, 1921 and 1922 hundreds of thousands of assessments were made under Schedule D. I agree with the statement made by the right hon. Gentleman that the decision of the House of Lords was a surprise, but what is being done by this Bill is that there are still a certain number of people who have not been assessed for 1920, 1921 and 1922 because they have escaped the

net, and by this Clause we are going to get them into the net, and we are going to catch them for past years. That is not a matter of equity. Surely, having, regard to the decision of the House of Lords, and the House of Lords having suggested that the law should be altered, the Chancellor of the Exchequer is perfectly entitled to alter the law, but let him start from April, 1922, and say that from that time they shall all come under Schedule F. Do not catch them by this Resolution after hundreds and thousands of them have got through. The Chancellor of the Exchequer has said that he will consider this point further, but I put it to him that he should accept the Lords' decision from the 5th April, 1922, backwards and from that date everybody should come under this few Clause.

Question put, "That those words be there inserted."

The Committee divided: Ayes, 99; Noes, 252.

Division No. 160.]
AYES.
[10.40 p.m.


Acland, Rt. Hon. Francis D.
Graham, D. M. (Lanark, Hamilton)
Parkinson, John Allen (Wigan)


Adamson, Rt. Hon. William
Graham, R. (Nelson and Colne)
Poison, Sir Thomas A.


Adkins, Sir William Ryland Dent
Graham, W. (Edinburgh, Central)
Raffan, Peter Wilson


Ammon, Charles George
Griffiths, T. (Monmouth, Pontypool)
Remnant, Sir James


Banton, George
Grundy, T. W.
Randall, Athelstan


Barker, G. (Monmouth, Abertiliery)
Guest, J. (York, W. R., Hemsworth)
Richardson, R. (Houghton-le-Spring)


Barnes, Rt. Hon. G. (Glas., Gorbals)
Hall, F. (York, W. R., Normanton)
Roberts, Frederick O. (W. Bromwich)


Barnes, Major H. (Newcastle, E.)
Halls, Walter
Robertson, John


Barton, Sir William (Oldham)
Hartshorn, Vernon
Rose, Frank H.


Bell, James (Lancaster, Ormskirk)
Hayday, Arthur
Royce, William Stapleton


Benn, Captain Wedgwood (Leith)
Hayward, Evan
Sexton, James


Bowerman, Rt. Hon. Charles W.
Henderson, Rt. Hon. A. (Widnes)
Shaw, Thomas (Preston)


Briant, Frank
Herbert Dennis (Hertford, Watford)
Short, Alfred (Wednesbury)


Bromfield, William
Hirst, G. H.
Sitch, Charles H.


Brown, James (Ayr and Bute)
Hogge, James Myles
Spencer, George A.


Cairns, John
Holmes, J. Stanley
Sutton, John Edward


Cape, Thomas
Irving, Dan
Swan, J. E.


Carter, W. (Nottingham, Mansfield)
John, William (Rhondda, West)
Thorne, G. R. (Wolverhampton, E.)


Clynes, Rt. Hon. John R.
Johnstone, Joseph
Thorne, W. (West Ham, Plaistow)


Collins, Sir Godfrey (Greenock)
Jones, Sir Evan (Pembroke)
Tillett, Benjamin


Conway, Sir W. Martin
Jones, J. J. (West Ham. Silvertown)
Walsh, Stephen (Lancaster, Ince)


Cowan, D. M. (Scottish Universities)
Jones, Morgan (Caerphilly)
Waterson, A. E.


Davies, A. (Lancaster, Ciltheroe)
Kiley, James Daniel
Watts-Morgan, Lieut.-Col. D.


Davies, Evan (Ebbw Vale)
Lawson, John James
Wedgwood, Colonel Josiah C.


Davies, Rhys John (Westhoughton)
Lister, Sir R. Ashton
White, Charles F. (Derby, Western)


Davison, J. E. (Smethwick)
Lunn, William
Wignall, James


Edwards, C. (Monmouth, Bedwelity)
Maclean, Neil (Glasgow, Govan)
Williams, Col. P. (Middlesbrough, E.)


Entwistle, Major C. F.
Maclean, Rt. Hn. Sir D. (Midlothian)
Wilson, James (Dudley)


Erskine, James Malcolm Monteith
Mills, John Edmund
Wilson, Col. M. J. (Richmond)


Finney, Samuel
Murray, Dr. D. (Inverness & Ross)
Young, Sir Frederick W. (Swindon)


Fitzroy, Captain Hon. Edward A.
Naylor, Thomas Ellis
Young, Robert (Lancaster, Newton)


Foot, Isaac
Newbould, Alfred Ernest



Galbraith, Samuel
O'Connor, Thomas P.
TELLERS FOR THE AYES.—


Gulls, William
O'Grady, Captain James
Mr. Walter Smith and Mr.




Kennedy.


NOES.


Agg-Gardner, Sir James Tynte
Baldwin, Rt. Hon. Stanley
Barrie, Sir Charles Coupar (Banff)


Ainsworth, Captain Charles
Balfour, George (Hampstead)
Bartley-Denniss, Sir Edmund Robert


Amery, Rt. Hon. Leopold C. M. S.
Banbury, Rt. Hon. Sir Frederick G.
Beckett, Hon. Sir Gervase


Armitage, Robert
Banner, Sir John S. Harmood-
Bell, Lieut.-Col. W. C. H. (Devizes)


Armstrong, Henry Bruce
Barker, Major Robert H.
Bellairs, Commander Carlyon W.


Astbury, Lieut.-Com. Frederick W.
Barnett, Major Richard W.
Benn, Sir A. S. (Plymouth, Drake)


Atkey, A. R.
Barnston, Major Harry
Benn, Capt. Sir I. H., Bart. (Gr'nw'h)


Baird, Sir John Lawrence
Barrand, A. R.
Bennett, Sir Thomas Jewell


Birchall, J. Dearman
Harris, Sir Henry Percy
Pickering, Colonel Emil W.


Bird, Sir William B. M. (Chichester)
Henderson, Lt.-Col. V. L. (Tradeston)
Pollock, Rt. Hon. Sir Ernest Murray


Blake, Sir Francis Douglas
Hennessy, Major J. R. G.
Pownall, Lieut.-Colonel Assheton


Borwick, Major G. O.
Hickman, Brig.-General Thomas E.
Purchase, H. G.


Bowles, Colonel H. F.
Hilder, Lieut.-Colonel Frank
Rae, Sir Henry N.


Bowyer, Captain G. W. E.
Hinds, John
Raeburn, Sir William H.


Boyd-Carpenter, Major A.
Hchler, Gerald Fitzroy
Randles, Sir John Scurrah


Breese, Major Charles E.
Hood, Sir Joseph
Rankin, Captain James Stuart


Bridgeman, Rt. Hon. William Clive
Hope, Sir H.(Stirling & Cl'ckm'nn,W.)
Rawlinson, John Frederick Peel


Briggs, Harold
Hope, Lt.-Col. Sir J. A. (Midlothian)
Remer, J. R.


Broad, Thomas Tucker
Hope, J. D. (Berwick & Haddington)
Richardson, Sir Alex. (Gravesend)


Brown, Brig.-Gen. H. C. (Newbury)
Hopkins, John W. W.
Richardson, Lt.-Col. Sir P. (Chertsey)


Buckley, Lieut.-Colonel A.
Hopkinson, A. (Lancaster, Mossley)
Roberts, Rt. Hon. G. H. (Norwich)


Bull, Rt. Hon. Sir William James
Horne, Edgar (Surrey, Guildford)
Roberts, Sir S. (Sheffield, Ecclesall)


Burdon, Colonel Rowland
Horne, Sir R. S. (Glasgow, Hillhead)
Robinson, S. (Brecon and Radnor)


Campion, Lieut.-Colonel W. R.
Hunter-Weston, Lt.-Gen. Sir Aylmer
Rodger, A. K.


Carr, W. Theodore
Hurd, Percy A.
Rutherford, Sir W. W. (Edge Hill)


Casey, T. W.
Inskip, Thomas Walker H.
Samuel, A. M. (Surrey, Farnham)


Cecil, Rt. Hon. Sir Evelyn (Aston)
Jackson, Lieut.-Colonel Hon. F. S.
Samuel, Samuel (W'dsworth, Putney)


Chamberlain, Rt. Hn. J. A. (Birm. W.)
James, Lieut.-Colonel Hon. Cuthbert
Sanders, Colonel Sir Robert Arthur


Chamberlain, N. (Birm., Ladywood)
Jephcott, A. R.
Sassoon, Sir Philip Albert Gustave D


Churchman, Sir Arthur
Johnson, Sir Stanley
Scott, A. M. (Glasgow. Bridgeton)


Clough, Sir Robert
Jones, G. W. H. (Stoke Newington)
Scott, Sir Leslie (Liverp'l, Exchange)


Coats, Sir Stuart
Jones, Henry Haydn (Merloneth)
Seddon, J. A.


Cobb, Sir Cyril
Joynson-Hicks, Sir William
Seely, Major-General Rt. Hon. John


Colfax, Major Wm. Phillips
Kellaway, Rt. Hon. Fredk. George
Shaw, Hon. Alex. (Kilmarnock)


Colvin, Brig.-General Richard Beale
Kelley, Major Fred (Rotherham)
Shaw, William T. (Forfar)


Cowan, Sir H. (Aberdeen and Kinc.)
Kidd, James
Shortt, Rt. Hon. E. (N'castle-on-T.)


Cralk, Rt. Hon. Sir Henry
King, Captain Henry Douglas
Simm, M. T.


Curzon, Captain Viscount
Larmor, Sir Joseph
Smith, Sir Allan M. (Croydon, South)


Dalziel, Sir D. (Lambeth, Brixton)
Law, Alfred J. (Rochdale)
Smith, Sir Harold (Warrington)


Davidson, Major-General Sir J. H.
Leigh, Sir John (Clapham)
Sprot, Colonel Sir Alexander


Davies, Alfred Thomas (Lincoln)
Lewis, Rt. Hon. J. H. (Univ., Wales)
Stanley, Major Hon. G. (Preston)


Davies, David (Montgomery)
Lewis, T. A. (Glam., Pontypridd)
Stanton, Charles Butt


Davies, Thomas (Cirencester)
Lloyd, George Butler
Starkey. Captain John Ralph


Dawson, Sir Philip
Locker-Lampson, Com. O. (H'tingd'n)
Steel, Major S. Strang


Dewhurst, Lieut.-Commander Harry
Lorden, John William
Stephenson, Lieut.-Colonel H. K.


Doyle, N. Grattan
Loseby, Captain C. E.
Stewart, Gershom


Edgar, Clifford B.
Lyle, C. E. Leonard
Sturrock, J. Leng


Edge, Captain Sir William
M'Connell, Thomas Edward
Sugden, W. H.


Edwards, Major J. (Aberavon)
Mackinder, Sir H. J. (Camlachle)
Surtees, Brigadier-General H. C.


Edwards, Hugh (Glam., Neath)
McLaren, Robert (Lanark, Northern)
Sutherland, Sir William


Bleeder. Viscount
Macpherson, Rt. Hon. James I.
Taylor, J.


Evans, Ernest
Mallalieu, Frederick William
Terrell, George (Wilts, Chippenham)


Falcon, Captain Michael
Manville, Edward
Thomson, F. C. (Aberdeen, South)


Falle, Major Sir Bertram Godfray
Marriott, John Arthur Ransoms
Thomson, Sir W. Mitchell- (Maryhill)


Farquharson, Major A. C.
Martin, A. E.
Townley, Maximilian G


Fell, Sir Arthur
Matthews, David
Tryon, Major George Clement


Flannery, Sir James Fortescue
Meysey-Thompson, Lieut.-Col. E. C.
Turton, Edmund Russboreugh


Ford, Patrick Johnston
Middlebrook, Sir William
Waddington, R.


Forrest, Walter
Mitchell, Sir William Lane
Wallace, J.


Foxcroft, Captain Charles Talbot
Molson, Major John Eisdale
Walters, Rt. Hon. Sir John Tudor


Fraser, Major Sir Keith
Mond, Rt. Hon. Sir Alfred Moritz
Walton, J. (York, W. R., Don Valley)


Frece, Sir Walter de
Morden, Col. W. Grant
Ward, Col. J. (Stoke upon Trent)


Fremantle, Lieut.-Colonel Francis E.
Moreing, Captain Algernon H.
Ward, Col. L. (Kingston-upon-Hull)


Ganzoni, Sir John
Morrison-Bell, Major A. C.
Ward, William Dudley (Southampton)


Gee, Captain Robert
Munro, Rt. Hon. Robert
Waring, Major Walter


Gibbs, Colonel George Abraham
Murchison, C. K.
Warner, Sir T. Courtenay T.


Gilbert, James Daniel
Murray, Hon. A. C. (Aberdeen)
Watson, Captain John Bertrand


Gilmour, Lieut.-Colonel Sir John
Murray, Rt. Hon. C. D. (Edinburgh)
Weston, Colonel John Wakefield


Glyn, Major Ralph
Murray, John (Leeds, West)
Wheler, Col. Granville C.


Goff, Sir R. Park
Neal, Arthur
White, Col. G. D. (Southport)


Gould, James C.
Newman, Sir R. H. S. D. L. (Exeter)
Wild, Sir Ernest Edward


Grant, James Augustus
Nicholl, Commander Sir Edward
Wills, Lt.-Col. Sir Gilbert Alan H.


Gray, Major Ernest (Accrington)
Nicholson, Reginald (Doncaster)
Windsor, Viscount


Green, Albert (Derby)
Norris, Colonel Sir Henry G.
Winfrey, Sir Richard


Green, Joseph F. (Leicester, W.)
Norton-Griffiths, Lieut.-Col. Sir John
Winterton, Earl


Greene, Lt.-Col. Sir W. (Hackn'y, N.)
Oman, Sir Charles William
Wise, Frederick


Greenwood, William (Stockport)
Ormsby-Gore, Hon. William
Wolmer, Viscount


Greer, Sir Harry
Parker, James
Wood, Hon. Edward F. L. (Ripon)


Greig, Colonel Sir James William
Parry, Lieut.-Colonel Thomas Henry
Wood, Sir J. (Stalybridge & Hyde)


Gretton, Colonel John
Pearce, Sir William
Woolcock, William James U.


Guest, Capt. Rt. Hon. Frederick E.
Pease, Rt. Hon. Herbert Pike
Yea, Sir Alfred William


Hacking, Captain Douglas H.
Peel, Col. Hn. S. (Uxbridge, Mddx.)



Hamilton, Sir George C.
Pennefather, De Fonblanque
TELLERS FOR THE NOES.—


Hannon, Patrick Joseph Henry
Perkins, Waiter Frank
Colonel Leslie Wilson and Mr.


Harmsworth, C. B. (Bedford, Luton)
Philipps, Sir Owen C. (Chester, City)
McCurdy.


Harmsworth, Han. E. C (Kent)




Question put, and agreed to.

The DEPUTY CHAIRMAN (Sir Edwin Cornwall): The next Amendment, standing in the name of the hon. Member for Thornbury (Mr. Rendall), to leave out
Sub-section (7), is consequential. The hon. Member has, however, handed in a manuscript Amendment.

Mr. RENDALL: I beg to move, in Subsection (7), after "1922–23" ["chargeable under Schedule D for the year 1922–23"], to insert the words "and for the three following years."
I apologise to the Committee for the fact that this Amendment is in manuscript, but they will sympathise with me when I say that I put down some Amendments to this Clause which attempted to realise more fully the object I have in view, but that those Amendments were ruled out of order on the ground that it was possible that I was laying the subject open to a further tax, which it is not within the province of a private Member to do. Consequently, I put down this Amendment, and I will endeavour to explain its object. Hon. Members will see that Sub-section (7) says that:
Income Tax in respect of profits or gains which would, but for the provisions of this Section, have been chargeable under Schedule D for the year 1922–23, may be charged for that year either under Schedule D or under Schedule E.
Hon. Members are, of course, aware from the preceding discussion that large numbers of persons, who have been accustomed to pay Income Tax upon an average of their income of the last three years, are going, as a result of Clause 12, to be compelled to pay Income Tax on their prospective incomes. The argument was adduced by the Chancellor of the Exchequer the other day that this change has been made necessary after the House of Lords decision, and that it was a very happy moment to make the change, because incomes were falling, and, therefore, for a large number, and perhaps the majority of salaried persons, it will be better for them to pay on their prospective incomes, as they will pay less than on the average of the last three years. I am not concerned to deny that it may be better for the majority of those persons that this alteration of the law should take place, but I am very much concerned, and the Committee ought to be concerned, to see that in making what may be a thoroughly good alteration of the law we are not doing a certain injustice to a minority of persons.
I think I can prove that this alteration would be a serious injustice to a minority of persons, and it seems to me they ought to be protected by some saving Clause. I endeavoured to put down a saving
Clause to prevent this alteration of the law harming certain persons, but because I was unable to draft the Amendment in the proper way it has been ruled out of Order. Consequently, the best I can do for those I seek to serve is to try and get this alternative of being taxed for this year on Schedule D or Schedule E in Sub-section (7) extended for a period of three years. That, at least, would help a great many hard cases and would not do much harm to the Treasury. It would make the injustice which is certainly going to be done by the Clause rather less if we spread it over that period. I should like to give an example of what is going to happen to an ordinary person who is not a Corporation employé, and who has been able to average his income. I have a case in my hand where a man was in receipt of an income of £145 in one year, 2280. the next year, and £400 in the third year, This particular taxpayer made a return a month before the Budget was introduced in which he showed that during the last three years he had made an average income of £265. After allowing for the deductions to which he is entitled, he would have to pay Income Tax on 2109, and that would amount to rather over £15. As a result of the proposal in the Bill this particular person is going to be asked to pay Income Tax on £500, to which his income has recently been increased. Therefore, as a result solely of this Finance Bill, if it becomes an Act, he is going to pay £50 Income Tax instead of £15. That seems to me a real injustice to accrue from an alteration of the law which may be a desirable thing in itself, and may be desirable for everybody in the long run, but which certainly ought not to be passed into law and to inflict so very serious an injury upon individuals who had no reason to expect such an alteration, and. who will have some difficulty in meeting an impost which they naturally did not anticipate having to pay. Such a person will come under the alternative proposal for one year, but he will not come under it in later years, and what I seek to do is to give him the option of being taxed under Schedule D or Schedule E for three years in addition to this period. That seems to me a fairly reasonable request to make, and I make it on other grounds as well. It is true that a large number of persons have had bonuses knocked off and their salaries decreased
and have perhaps had misfortunes in recent years, and therefore the Chancellor of the Exchequer has told us this is probably the most desirable moment in which to make this change. But when the War was over a large number of young men came back into industry. They had had their industrial training put off and they commenced with very low salaries. They have been gradually working up from £150, say, to £250 or more since that time and suddenly we say to a young officer who has been trained and maybe has increased his income and has been relying on that increase of income which he has won by merit, "Instead of charging you £15 tax this year, as you expected would be the case, we are going to turn that tax into £50 this particular year and in future you will not be allowed to average your bad years when you were training and getting very small sums." That seems to me a very grave injustice to young men who have done a great deal for their country, have had their careers interfered with very badly and have a right to look to the country, at least, not to make any sudden alteration of the law, which, while it may be good for the country and taxpayers generally, is a real hardship to young men of this kind who have had to make their way and have had great difficulty in doing so. It is not rewarding their meritorious conduct or training or hard work as it ought to be rewarded, but inflicting on their success a special legal hardship. That, I think, the Committee ought to avoid if it can. I therefore propose, in addition to the one year's hardship, which the Chancellor of the Exchequer proposes to save them from, to enlarge that very slightly, at very small cost to the Exchequer, and give three extra years during which they will average instead of paying on their prospective income. It is not only a hardship this year, but it may be a hardship next year. Their income can still go up in view of their meritorious work and we have every reason for saying to these men, whose career has been interrupted, "We will not make an alteration of the law which will he had for you, although it may be good for a great many other people."

11.0 p.m.

Sir L. SCOTT: I understand the object of the Amendment is to give persons taxed, by reason of the provisions of the
Clause as a whole, under Schedule E, the option to be taxed under Schedule D, not only for the year 1922–23 but also for the three following years. The objection to accepting the Amendment is, that this Sub-section has nothing whatever to do with the subject. The Sub-section does not give an option to the taxpayer to be taxed under one Schedule or the other Schedule. Consequently the Amendment to extend the number of years will not confer a power that the Section does not give for the first year. This Sub-section is a pure machinery Sub-section, and has nothing whatever to do with any question of option as to paying under one Schedule or the other. The simple and sole object of this Subsection is this: during the last few months, as the result of the House of Lords' decision, some assessments have been written in a book called Schedule D hook, which I shall call the blue book. Some have recently been written in Schedule E book, which I shall call the brown book, and this Sub-section simply says that assessments which have been written in the blue book need not, as a matter of clerical work, be transferred to the brown book. Whichever book they are in, the tax shall be computed as the Clause provides, under Schedule E.

Amendment negatived.

Clause ordered to stand part of the Bill.

CLAUSE 13.—(Income under revocable and certain other dispositions to be treated as income of disponor.)

(1) Any income—

(a) of which any person is able, or has at any time since the fifth day of April, nineteen hundred and twenty-two, been able, without the consent of any other person not being his wife or her husband, by means of the exercise of any power of appointment, power of revocation or otherwise howsoever, to obtain for himself the beneficial enjoyment; or
(b) which by virtue or in consequence of any disposition made, directly or indirectly, by any person after the first day of May, nineteen hundred and twenty-two (other than a disposition made for valuable and sufficient consideration), is payable to or applicable for the benefit of any other person for a period which cannot exceed six years; or
(c)which by virtue or in consequence of any disposition made, directly or in-
1199
directly, by any person whether before or after the commencement of this Act, is payable to or applicable for the benefit of a child of that person for some period less than the life of the child;
shall, subject to the provisions of this section, but in cases under the above paragraph (c) only if and so long as the child is an infant and unmarried, be deemed for the purposes of the enactments relating to income tax (including super-tax) to be the income of the person who is or was able to obtain the beneficial enjoyment thereof, or by whom the disposition was made, as the case may be, and not to be for those purposes the income of any other person.

(2) Where by virtue of paragraph (b) or paragraph (c) of subsection. (1) of this section any income tax or super-tax becomes chargeable on and is paid by the person by whom the disposition was made, that person shall he entitled to recover from any trustee or other person to whom the income is payable by virtue or in consequence of the disposition the amount of the tax so paid, and for that purpose to require the Commissioners concerned to furnish to him a certificate specifying the amount of the income in respect of which he has so paid tax and the amount of the tax so paid, and any certificate so furnished shall he conclusive evidence of the facts appearing thereby.
(3) Where any person obtains in respect of any allowance or relief a repayment of income tax in excess of the amount of the repayment to which he would but for the provisions of paragraph (b) or paragraph (c) of subsection (1) of this section have been entitled, an amount equal to the excess shall be paid by him to the trustee or other person to whom the income is payable by virtue or in consequence of the disposition, or where there are two or more such persons shall be apportioned among those persons as the case may require.
If any question arises as to the amount of any payment or as to any apportionment to be made under this subsection, that question shall be decided by the General Commissioners whose decision thereon shall be final.
(4) Any income, which is deemed by virtue of this section to be the income of any person, shall be deemed to be the highest part of his income.
(5) In this section, unless the context otherwise requires—

The expression "child" includes stepchild or illegitimate child;

The expression "disposition" includes any trust, covenant, agreement or arrangement.

The DEPUTY-CHAIRMAN (Sir E. Cornwall): The Amendment standing in the name of the right hon. Member for the Gorbals Division (Mr. G. Barnes)—in Sub-section (1, a), to leave out the words
is able, or has at any time since the fifth day of April, nineteen hundred and twenty-
two, been able, without the consent of any other person not being his wife or her husband,"—
is nugatory.

Mr. BARNES: Do you rule me out of Order?

The DEPUTY-CHAIRMAN: I am endeavouring to do so. I said the effect would be nugatory. If the right hon. Member can show that it is not nugatory, I will put the Amendment.

Mr. BARNES: I beg to move, in Subsection (1, a) to leave out the words
is able, or has at any time since the fifth day of April, nineteen hundred and twenty-two, been able, without the consent of any other person not being his wife or her husband.
I agree with the clause in so far as it deals with certain gentlemen who hand over certain sums of money to their sons, nephews or other relatives so as to avoid income tax. I want to get tax from income of that kind, but as the clause is framed it is a good deal wider and will bring into its scope a good many cases not contemplated. There are certain cases where money has been set apart for certain beneficient purposes. Take the case of a man who has put aside a certain sum of money to maintain from the income thereof an imbecile relative. It seems to me that the income from that sum of money which had been paid for many years, and in which case there was no intention to revoke, might be taxed. The income from that money might have been applied to the. purpose for which it was intended for a number of years, but if the man has revoked from the 5th April, 1922, he is liable to pay tax. Surely that is an injustice. I cannot believe that the Government had that in their minds. Take another case. A man leaves a certain sum of money which, on his death, is to be used for the purpose of setting up some institution. He deprives himself of the income. Therefore he is entitled to exemption, but if this Clause passes then, whether he gets the money back or not, he is still liable to tax. Is it the intention to tax not only the man who puts a sum of money into the hands of his son and thereby escape taxation on that sum of money by getting it back, but also to tax the other man who has put aside a sum of money to maintain an imbecile relative or an institution when he is dead?
I would like some explanation from the Government. If my Amendment were carried, the question of being taxed would depend entirely upon whether the income was brought back into the man's hands and if it were not he would not be taxed.

Sir L. SCOTT: I think that it is because of the way the Clause would read that you, Mr. Chairman, intimated your view that the Amendment would be nugatory and it was therefore out of order. It leaves the law exactly as it stands as any income of which any person obtains himself the beneficial interest is income subject to tax. Therefore I am afraid that the Amendment does not raise any question, and I submit that there is nothing to debate.

The DEPUTY-CHAIRMAN: Mr. Dennis Herbert.

Lord R. CECIL: I submit that the Amendment must be dealt with somehow.

The DEPUTY-CHAIRMAN: I said that unless it could be shown that it was not nugatory it would be out of Order, and I had to decide on that point.

Mr. D. HERBERT: I beg to move in Sub-section (1, a) after the word "however" to insert the words
under or in consequence of any disposition made directly or indirectly by him.
The short illustration of what I want to provide against is this: A father of a family may have a close friend who dies and leaves a sum of money, the income of which is to be paid to that father's children unless and until the father should see fit to deprive them of the income and take it for himself. I cannot suppose that in those circumstances it would be intended that the father should be charged on income which is given by some other person altogether for the benefit of his children just by reason of the fact that the person who left the money, trusting the father, as being a good father, has given him a right to take that income for himself if he sees fit.

Sir L. SCOTT: The Amendment is, as suggested, not inconsistent with the general scope of the Clause. Subject to re-wording and one minor point, I think we should be disposed to accept it. The minor point is this: Where the disposition is made directly or indirectly by him,
there should be a limitation in the case of a wife, or, where the disponor is a woman, a limitation in the case of a husband, in respect of an unlimited power of appointment. Subject to that limitation and the wording we would consider the Amendment for the Report stage.

Mr. D. HERBERT: I quite agree with the qualification of the Solicitor-General, and by leave will withdraw the Amendment now.

Amendment, by leave, withdrawn.

Lord R. CECIL: I beg to move in Sub-section (1) to leave out paragraph (b).
I would like to know what this paragraph means. I am a little puzzled by it. Is it intended to stop some kind of evasion of the tax? Suppose a man makes a grant to a charity and undertakes to pay for three, four or five years so much a year. Is that still to be counted as part of his income? It is very hard if that is to be done. If a man makes the grant for more than six years it would not be counted as part of his income. Why is it part of his income if made for less than six years?

Sir R. HORNE: This Clause does not apply merely to cases of charities, but to all cases in which dispositions are made for a very short space of time. The first part of the Clause deals with cases where the gift which the disponor makes is revocable. That is Sub-section (1a). It is apparent in such cases that you may have many devices adopted by people for putting property apparently out of their hands and ceasing to perform their due obligation by paying income Tax on it, but having the power to call it back at any moment they choose. The second case, though it does not jump to the eye quite as readily as the first, is equally to be animadverted upon. You find people who put out of their power for a short period of time certain properties upon which they would otherwise be deriving income, and that income is no longer assessed for Income Tax. Let me take the case of charities mentioned by my Noble Friend. Charitable gifts should be made after a man has performed his ordinary, obligations. It is not enough for a man to give say, £10,000 in charity, if in fact £5,000 of that has been taken from
the Government. [HON. MEMBERS: "Oh, oh!"] Undoubtedly it is taken from the Government. The ordinary person's gifts to charity are those which he makes after paying his Income Tax. He is not entitled to deduct from the amount of his income what he gives in charity before he pays Income Tax. He pays Income Tax as a citizen of the country and what he gives in charity, he deprives himself of—that is the only charitable gift worth having, or at any rate the only one which should be commended. If a man spends £10,000 upon charity and deducts it from his income for the purposes of Income Tax—

Mr. A. M. SAMUEL: And gets a title.

Sir R. HORNE: While he gets credit for a charitable gift to that amount he is really depriving the State of a considerable portion of it, which is required by the State to keep up its revenue. Taking the ordinary case upon a single year, it does not make any difference but it seems to us if a man in good health and vigour thinks that over a period of say five years he can foresee certain income and gets credit for a charitable gift of say £5,000 a year for five years it is partly at the expense of the revenue to which the State is entitled as Income Tax upon that money.

Lord R. CECIL: indicated dissent.

Sir R. HORNE: The Noble Lord shakes his head, but it seems to me that under ordinary principles what I say is obvious. It is necessary then to fix some point of time. I do not say six years is the best—it might be two or three or four years, but it must be fixed somewhere. We assume that if a man makes a gift for more than six years that implies a more settled intention, than if it is only for five years, of putting the fund beyond his own power. We might have made it 10 or 15 years, and it may be said if we had made it 20 years it would be still clearer. In initiating this legislation we took what we thought was a reasonable period sufficient to reveal a settled intention. It is possible to make an appeal on the ground of charity, and the Noble Lord has put the best possible case, but a man might, by a revocable deed for a short period of time, make gifts where really there were certain obligations or claims, thereby depriving the State of revenue to
which it was entitled. It was at cases of that class we intended to strike and not any special case of gifts for charity, although I do not think it is possible to make special exemptions in favour of charity. Accordingly, I ask the Committee not to favour the Amendment.

Lord ROBERT CECIL: Before asking leave to withdraw my Amendment, I would like to appeal to the Chancellor of the Exchequer on the question of charity and ask whether he will, between this and the Report stage, consider that question again. There is another Amendment which raises that quite specifically, not seeking to strike out the whole Subsection, but seeking to deal with that particular point. I do not want to argue the general principle of the Sub-section, because I do not think it would serve any useful purpose, though I think something might be said on the other side, but I want to point out that, though it may be true that the State will gain a very small sum by excluding such gifts as these to charity, yet the injury done to the charity will be out of all proportion to the benefit done to the State. The right hon. Gentleman may get a few thousand pounds possibly by insisting on this, but the injury done to the charity will be a great deal more, because it will mean a great discouragement, particularly at a time like this, when it is difficult to get money for any charity. To add difficulties of this kind, particularly difficulties which have not existed up to now, will do a very considerable injury, and I hope my right hon. Friend will not shut his mind but will consider whether he cannot do something to meet that case, while leaving the general frame of this Sub-section un-altered.

Sir R. HORNE: I am very willing to consider any proposition of that kind, and I have, of course, made special exemptions in favour of charity before. I will consider it again.

Lord R. CECIL: I am very much obliged. I ask leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

Mr. D. HERBERT: I beg to move in Sub-section (1, b) to leave out the words "and sufficient."
The phrase is "for valuable and sufficient consideration." The term "valu-
able consideration" is very well known to lawyers, but I do not know the meaning of "sufficient consideration," and as far as I am aware it has got no recognised legal meaning. If the Solicitor-General can find some phrase which has a definite legal meaning and which would add something to "valuable consideration" in order to carry out the intention of the Sub-section, he will no doubt meet my point, but in the meantime the use of the word "sufficient" seems only to be calculated to give an opportunity to members of his profession and mine to make money in litigation.

Sir L. SCOTT: I am afraid that to take out the words "and sufficient" would defeat the object of the Clause, for if they were taken out we should have it provided that if the disposition was made for a valuable consideration the provisions of Sub-section (1, b) would not apply at all. In law a valuable consideration is, for instance, one penny; in other words, a coach-and-four could be driven through the Clause straight away. Whether the words "and sufficient" are enough to prevent that sort of thing being done, we will, in view of the remarks of the hon. Member carefully consider between now and the Report stage, and see whether more effective words could be introduced, but to take them out is quite impossible.

Mr. INSKIP: Could my hon. and learned Friend say who are to be the judges of a sufficiency of consideration, because I think the Committee will agree that there are obvious objections to putting words in taxing Acts leaving the subject at the mercy of an official, or at the pain of having to go through a Court of Law to override an official. Of course, I agree that the hon. and learned Gentleman is probably right in saying that some amplification is required of a word which, in itself, would imply nothing, but I hope some words will be found which will enable a subject to judge for himself, instead of driving him to some assessor or somebody else who wilt be merely expressing an opinion, as to which there will be nothing to guide him on the subject.

Sir L. SCOTT: Of course, the tribunal to decide whether the consideration is sufficient would be the Commissioners, as in every case of Income Tax questions,
but we will consider the suggestion of my hon. and learned Friend.

Amendment negatived.

The DEPUTY-CHAIRMAN (Sir Edwin Cornwall): The next Amendment in the name of the hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood), in Sub-section (1, b), to leave out the words "cannot exceed six years," and to insert instead thereof the words "may be less than the life of that person," is beyond the Resolution.

Colonel WEDGWOOD: May I ask why my Amendment is not in Order? At present, if a man wants to evade his Income Tax by dividing his property among his children, he is prevented from doing so under paragraph (a), revocable trusts, but under paragraph (b) he is allowed to make a revocable trust for more than six years, and escape. I am seeking by my Amendment to extend that, so that it must be for the life of a child. I want to prevent the father getting rid of his income while the child is at college, and then resuming it. I want to see that the devolution of capital is genuinely for the benefit of the child.

Sir R. HORNE: That is done by paragraph (c).

Colonel WEDGWOOD: I do not move.

Mr. INSKIP: I beg to move, in Subsection (1, c), to leave out the words "whether before or."
I can easily understand, as anybody can, the desire to hit the people who have been so wickedly ingenious as to make a settlement before the commencement of the Act, but, when all is said, these settlements are binding, and they were legal when they were made. It is a dangerous thing for the Government to introduce into a taxing Act, whether or not there is precedent for it, proposals which are retrospective in their action. These settlements were perfectly legal, and great judges have said over and over again that the subject is entitled to avoid—not to evade—taxation if he can. People legally parted with income, and they cannot recover it so long as the settlement stands, but this proposal in the Bill will go over years which have passed, and say that these settlements should be subject to a burden which was not in existence at the time—
in other words, it is an attempt for the law to be retrospective in its effect. I take great objection to that. My right hon. Friend could easily imagine cases in which future Governments would adopt this principle, and the result would be that none of us would know whether a perfectly legal arrangement that we are making to-day would not 5 or 10 years from now be made the subject of taxation.

Sir R. HORNE: My hon. and learned Friend is under some misapprehension as to the effect of the Bill. It is not retrospective. If we were making a person who had made a disposition by trust, in say five or six years to pay income Tax upon that which he in the interval had so put under trust, he would be right. But the operation of the law will only begin in the coming financial year.

Mr. INSKIP: I do not suggest otherwise.

Sir R. HORNE: This is not in any sense retrospective. The hon. and learned Gentleman points to what he terms the anomoly created in the case of some people who a few years ago had made these trusts in favour of their children—whom they are under not merely a moral, but a legal obligation to support. You find people who try to avoid the payment of Income Tax upon a fund set aside for the purpose, while others, who are making the trust now, would become subject to Income Tax in similar instances. But you cannot have two sets of citizens working under different arrangements! Nobody is asked to pay upon these trusts until this year, or pay Income Tax upon the monies thus set aside. It would seem to be absurd to say that because a man happened to have made his trust, perhaps a week or even a month ago, before this legislation comes into operation, that he should escape the liability that every citizen is under who had not been clever enough to have thought of this device soon enough to escape the obligation from Income Tax. Accordingly, I am afraid, with every desire to meet my hon. and learned Friend, I cannot ask the Committee to accept the Amendment.

Mr. INSKIP: My right hon. Friend scarcely appreciates the position I am trying to put forward. I never suggested that it was an attempt to go
back and get taxation in respect of past years. Let me give an illustration—an extreme one. My right hon. Friend says that you have two classes of persons—the person who made the settlement before the Act and the one who made it after. The settlement made before the Act would be free from taxation, and after the Act subject- to it. He says that is an anomaly. I say the man who made a settlement before the Act was passed made it believing it would be free from the incidence of taxation, while the man who makes one after the passing of the Bill will do it with his eyes open, and will know he is parting with income notwithstanding that he will still have to pay taxation on it. He will do it knowing what the law is. Let me give an illustration of what I think would be objectionable. Some people have suggested it is an offence for a man to live in a very big house containing say twenty or more bedrooms. Today it is perfectly lawful for a man to take a big house and to pay £500 a year for a lease for 25 years. That does not involve taxation on the sum so paid. But it is conceivable that the Government may go to a man who has taken a big house of that character under such conditions as include a rent of £500, and may call upon him to pay £100 a year as long as he lives in the house. I should call that retrospective legislation, because it would be making the man pay although he had entered into possession before any idea of imposing such taxation was conceived. I hope the Committee will adopt the suggestion I have made. I shall carry my proposal to a division.

Sir F. BANBURY: I cannot hope that the Chancellor of the Exchequer will reconsider his decision. Put shortly the case is this Last year, or last month, a person entered into an agreement which was legal. An alteration is subsequently made in the law which provides that after a certain date any agreement entered into in the same sense shall be illegal. There can be no objection to that, because people will know that if they make such an agreement it will be illegal.

Sir R. HORNE: But in this case the agreements are not made illegal; we only say that a person who makes one will after a given date be liable to Income Tax on the property dealt with in the agree-
ment. It only means that the liability to Income Tax will continue in the same way as if a man had to maintain his children without the trust.

Sir F. BANBURY: When I said "illegal," I did not mean in the sense ordinarily accepted that it was illegal. What I meant was that the man would not be able to avoid the payment of Income Tax. As the law stood a month ago, a man could enter into an agreement under which he would not he liable to taxation on the income involved. It was perfectly illegal for him to do that, but now the Chancellor of the Exchequer says that a person who makes such a settlement shall be liable to be taxed on the income with which he has parted in the settlement. I say it is retrospective to lay it down that a person who made a settlement for a certain number of years made it quite legally, being well aware that he was doing something which would enable him to avoid payment of certain taxation—I say it is retrospective now to make him liable under that same agreement to taxation. You are tearing up the agreement, although it was legal at the time it was entered into, and you are going to say that it is not going to be legal in the future. When you make an alteration in the law there must be anomalies created. Alterations are responsible for the anomalies, but I have never yet known of legislation being passed which says that while it is legal to enter into an agreement, that agreement may be torn up and done away with by new legislation. That is the whole point.

Colonel WEDGWOOD: I sincerely trust that the Chancellor of the Exchequer will not be induced to make this change. I know the case put forward by the hon. member for Bristol (Mr. Inskip). It is that a man who made a settlement before this came into operation now finds he is liable to Income Tax. But he can immediately put, himself right and avoid the taxation altogether if he will only draw up a fresh settlement for the life of the child instead of for a short period of years only. This amendment here is the children's charter.

Mr. INSKIP: The hon. and gallant Gentleman is quite wrong. A man cannot revoke a settlement he has made under which he has parted with his income.

Colonel WEDGWOOD: But he can extend it for the life of the child. The whole point it seems to me is this; are parents to be allowed to settle property temporarily on the children while retaining control over the children? Are we to say that if a man is going to divest himself of his income and to make it over to his children it must be for the life of the children? In ordinary cases a man put his stocks and shares in the joint names of himself and his child and directs that the dividend shall be paid to the child's account. Are we to say that the, parent after divesting himself of his income is to be allowed to set up dummy children as it were to make a temporary alienation of income during the education of the child? The whole advantage of this clause, as I see it, is that it enables the child to get security. It will he able under this Clause to marry as it thinks fit. It will be able to quarrel with its parent and to adopt a different line of business to the one the parent desires it to follow. It makes the child independent. In divesting himself of his capital, however, the parent will not be relieving himself of the liability to pay Income Tax. If the parent retains control by making only a temporary alienation the Government is right to see that that temporary alienation does not save the parent from paying Income Tax.

Sir OWEN PHILIPPS: I strongly object to any citizen trying to avoid just taxation. In my view this proposal, subject to a reasonable qualification which I will presently suggest, is not in any way retrospective. The only way in which it is retrospective is because it says that if a man has settled £500 a year on his child and therefore avoids paying Income Tax or Super-tax upon the amount in future he will have to pay such taxation provided this Act is passed by the Government, with the qualification that in any settlement that was made prior to this date the person who settles the money should have the right of deducting, before paying that settlement, from the person who receives the benefit of the settlement the amount of the Income Tax or Super-tax. That prevents it in any way from being called retrospective taxation, and it would be just to everyone.

Mr. BETTERTON: As I was responsible for putting this Amendment on the Paper, I should like to say a few words about it. I have not the slightest notion what the
hon. and gallant Member for Newcastle-under-Lyme (Col. Wedgwood) means by "dummy children." What I mean is that although it may be perfectly right and just to prevent arrangements being made of the kind which this Clause is designed to prevent, it is a most mischievous precedent to set up in this House, that you can alter by legislation deeds which have been entered into under the provisions of the law heretofore. The effect of the Clause as it stands is to materially alter deeds which have been entered into under the law, quite legally, hitherto. Although the Committee might well come to the conclusion that in future these arrangements should not be entered into, it is very wrong to set up a most, dangerous and mischievous precedent and alter arrangements entered into in the past.

Mr. HOLMES: Hon. Members opposite are opposed to retrospective legislation in this respect. I am sorry they did not vote for the last Amendment, which sought to prevent the retrospective assessment of railway workers. It would be better if hon. Members, for the sake of equality amongst all classes, would vote against retrospective legislation in every case, and not simply in cases in which they are particularly interested.

Sir F. BANBRY: We always do.

Mr. HOLMES: The right hon. Baronet does. In regard to this proposal of the Government, it is known to everyone that for years wealthy men with young families have been setting aside so much for each child, thereby getting the full allowance for the child, and reducing the rate of tax. That has been done deliberately for the purpose of avoiding Income Tax and Super-tax. These people have not only been depriving the Exchequer of money, but they have been causing other people to pay more Income Tax and Super-tax as a result of their action. The Chancellor of the Exchequer has to meet expenditure, and after putting so much on sugar, tea, beer and other things, he comes to the Income Tax and fixes the rate. If a certain number of people can, by means of these trusts, avoid paying their fair share of Income Tax and Super-tax, it means that other people have to pay a higher rate. A large number of people have for four or five years avoided a certain amount of Income Tax and Super-
tax by deliberately creating trusts. There can be no injustice in now asking them to pay their fair share of taxation.

Mr. D. HERBERT: On the face of it I should have the greatest sympathy with the views put forward by my learned Friend the member for Rushcliffe (Mr. Betterton), and the right hon. Baronet, but I cannot help thinking that they are under a slight misapprehension. Has Parliament the right in future, say, to abolish the freedom from Income Tax on the first £135 of a single person's income? No doubt they will say that Parliament has a perfect right to do that. Parliament also has a perfect right, at any time, to alter the rate of tax which it levies upon persons with any particular income. The effect of this particular Clause, as of course my hon. and learned Friend will admit at once, is not to alter in the slightest degree the settlement that has been made, but to alter the amount of tax which has to be paid by the beneficiary under that settlement.

Mr. BETTERTON: indicated dissent.

Mr. HERBERT: My hon. and learned Friend shakes his head. I would ask him if he has read Sub-section (2). Under that Sub-section, if a man who makes a settlement has, as a result of this Clause, to pay tax upon income which he has given away by that settlement, he can recover that tax, and that makes it in effect payable by the person to whom he has given the income. Therefore the only effect of this is to increase the tax payable by the child who becomes the beneficiary under the settlement made. If you admit that this House has the right to alter the rate at which any person in this country is taxed and the incidence of taxation upon members of the family, then you cannot possibly argue that this is retrospective legislation in the way of being legislation which alters instruments which have been made under the law which existed at the time they were made. I am not arguing now the question whether it is right or advisable, but simply the question of retrospective legislation. I suggest this is only an alteration of the rate of tax which is payable by certain members of the family. An agreement previously made is not torn up or affected in the slightest way, it remains perfectly good. The beneficiary under it is entitled to recover; the deed
is not altered; it merely increases the taxation and the rate of tax which has to be borne by the beneficiary under it.

Sir L. SCOTT: It is quite clear that there is a considerable number of members of the Committee who are anxious about the effect of this Clause. I am asked by the Chancellor of the Exchequer to say at once that between now and the Report stage we will give very careful consideration to this Clause in order to see whether there is ground for the apprehension expressed, and, if necessary to bring up some provision on Report which will remove the grounds of objection. Subject to that, I want to make one or two comments to the Committee which may be important. As regards paragraph (a) of the Clause, dealing with revocable dispositions, obviously this Question does not arise. In that case the remedy of the person who made it, when he is asked to pay taxes under the provisions of this Clause, is to revoke the disposition. With regard to the irrevocable dispositions, there are two categories which we have to consider; those made for a definite period of not less than six years and those which are made in favour of a child for less than the period of the child's life.
With regard to the law, it has always been open to the disponor to get out of the Clause altogether by extending the existing settlement up to the whole life of the child by a supplementary deed, which can, of course, always be done. As to the cases which come under paragraph (b), namely, settlements in favour of anybody for a period of six years, for that comparatively short period of six years there may be a few cases where the Question will arise. Just let us consider one thing upon that. As was pointed out by the last speaker, under the provisions of this Clause, although the settler will be treated as being personally entitled to the income which, in fact, is being paid to the person in whose favour the disposition has been made, whether it be a child or some other person, yet on paying the tax he will be entitled to recover the tax which he pays from the person who is in fact in receipt of the income. Therefore he is not actually asked to pay out of his pocket. He gets it back from the person who is in receipt of the income. Lastly—and this is an observation of considerable importance—supposing Parliament thought it right to
impose a tax on persons who have put their income out of their power for the purpose of maintaining their children, as contemplated, for instance, by paragraph (c), not considering any question of future disposition at all, but simply said, "If parents put their income out of their power they are doing something which, from the taxation point of view, we think is wrong.
We think it is the moral duty of every parent to support his children and to pay for their maintenance and education." The cost of doing that is part of the ordinary expenditure of any man's income, and being a part of his ordinary expenditure, it comes out of his income after he has paid tax on his income. It is a legitimate view to take that every parent in that position who has put income out of his power should be treated in the same way as any other parent who maintains his children by the same expenditure of money, paying it, out of his pocket instead of through a trustee. That is a view I should like the Committee to consider between now and Report. In so far as that view is justifiable, no question whatever of retrospective legislation arises because it is simply the expression of a view as to what is right and proper in the way of taxation of individual members of the, community. Mark the position. If that view be enforced on all parents who make a disposition of this type in favour of their children—

Colonel WEDGWOOD: For less than the child's life.

12 M.

Sir L. S COTT: For less than the child's life, whether they happen to have made it last February or next August, primâ facie, except from the point of view of retrospective legislation, there is no difference between them. That is a point of view that ought to be considered. On the other hand, if this criticism were accepted and the Amendment adopted, the result would be that those parents who knew perfectly well what they were about, and that it was their duty to maintain their children and wanted simply and solely to escape their proper burden and put it on to other people's shoulders, would get off, while everyone doing it in the future would be hit. It is a question of comparative advantage and disadvantage.
There is much to be said for the view ex-pressed in the Clause, in spite of the objection we all have to retrospective legislation.

Mr. INSKIP: I am obliged to the Chancellor of the Exchequer and the Solicitor-General for what they have said. I think Clause 2 requires a great deal of Amendment if it is to have the effect which the hon. Member for Watford suggested. I am quite content to accept the assurance that the matter will be considered, and I ask leave to withdraw the Amendment.

HON. MEMBERS: No!

Amendment negatived.

Mr. D. HERBERT: I beg to move in Sub-section (1, c), after the word "child" ["for the benefit of a child"], to insert the words "or children."

Sir L. SCOTT: I will consider the words if the hon. Member will now withdraw the Amendment.

Amendment, by leave, withdrawn.

Mr. D. HERBERT: I beg to move in Sub-section (1, c), after the word "of" ["a child of that person"], to insert the words "that person or of."
In order to be outside this Clause, the disposition made by a parent must be for some period not less than the life of the child. The object of my Amendment is that it may be for a period less than the life of the child if that period is not less than the life of the parent making the settlement. It is to meet the case of a parent who has a considerable income for life, either as a life tenant or from his own earnings, and is therefore able to make provision for his children under a settlement for as long as he lives, but is unable to saddle his executors with the same liability.

Sir L. SCOTT: I am not quite certain that I have fully understood the Amendment, but if it is what I think it is, I think we can accept it. I believe the hon. Member really wants to get at the case of a man who makes a disposition, it may be, for less than the life of his child but for the whole of his own life, out and out, absolutely getting rid of his life interest. If that is what is meant I think that I can favourably consider it.

Mr. HERBERT: Does the Solicitor-General ask me again to withdraw?

Sir L. SCOTT: Please.

Mr. HERBERT: I will do so, but I shall have a long list of the assurances which my hon. Friend has given me.

Amendment, by leave, withdrawn.

Mr. INSKIP: I beg to move, at the end of Sub-section (1, c), to insert the words
and at the end of such period becomes payable to or applicable for the benefit of the person by whom the disposition was made.
The object of this Amendment is to make plain what I think is really meant by the Clause as it stands. As it stands I am afraid that it will tax people who are not intended to be caught. The words proposed show that when the settlement is made for a period less than the life of the child—it may be 18 or 20 years until a child becomes an adult, when the capital shall become the property of the child—the income shall not be caught. These words will make plain that all that is hit is something analogous to the revocable settlement that is made for a time, the benefit of which is to revert to the person who makes the settlement. The Clause reads as if the income, which by virtue of the settlement is applicable to the benefit of the child for a period less than the life of the child, will have to be taxed as if it were the income of the person making the settlement. Those words would lead to this result. Suppose that I settle property on my daughter for a period less than the life of my daughter, say 21 years, that income under the Clause in its present form remains the income of the person making the settlement, and taxation has to be paid upon that money. As the law stands to-day it would be regarded as the income of the person on whom the settlement would be made, and when she became 21 the capital would become hers. If the settlement settled the property on the daughter until she was 21 years old and the capital then became the property of the person making the settlement I would agree, but—

Sir L. SCOTT: That is what is meant.

Mr. INSKIP: It is not made clear. The complexity of the Income Tax laws is very great. The Amendment would make plain that the only settlements that are hit are these settlements under which the
capital reverts to the person who originally made the settlement.

Sir L. SCOTT: I would like a little further assistance from the hon. and learned Member as to the effect of the Amendment, because, if I understood it aright, it is inconsistent with the general purport of the Clause. As I understand him, he means that income which is settled on a child for less than the child's life should be deemed to be the settlor's income only if at the end of the settlement the income is to revert to the settlor, and, for instance, shall not be treated as settlor's income if, at the end of the enjoyment of it by the child, it was to go to some trustee who might be a dummy trustee. Does my hon. and learned Friend suggest that during the time that the child is enjoying the income which ex hypothesi is for the maintenance and education of the child—an ordinary purpose—although it is thereby saving the father the expenditure he would ordinarily make out of income which has paid tax, that expenditure should not be treated as income for taxation purposes just because, at the end of the child's childhood, that income is to go to somebody else. If that is the case, why should not the income be taxed during the childhood of the child and not cease to be income of the father until it becomes the property—absolutely—at some future date of somebody else?

Sir F. BANBURY: What I understand is the point put to me by a lawyer, and u hat I understand my hon. and learned Friend the Member for Central Bristol (Mr. Inskip) means is that where a settlement is made for the life of the child the person upon whom the settlement is made should pay the tax if made for the life of that person. That is right. Very well! Then this may arise. Let us suppose that I settle on my daughter the income of £1,000 until she is twenty-one years of age. At twenty-one she does not get the income of £1,000, but takes the £1,000 out and out. It has been put to me that the. question does arise that she would only be exempt if she only had the income for the whole of her life. I am told by members of the legal profession that that is done. Let, us make that clear.

Sir L. SCOTT: May I answer that? An income settled upon a child during childhood, the child receiving the capital
at the end of her childhood, is outside this Clause altogether. If there is any doubt about it we will put, words in to make it clear.

Mr. INSKIP: I have words down later en the Paper which would, I think, give effect to what my hon. and learned Friend desires to do.

Sir FREDERICK YOUNG: I think the Amendment does leave the door open to the defeat of the object of the Clause inasmuch as a settlor might settle money on a child for twenty-one years, and then provide that for a very limited period it should be paid, say, to his wife for one year or so, and that then it should revert to the settlor. In that case under the suggested wording the settlor would escape the Income Tax.

Sir F. BANBURY: We do not want that.

Mr. RAWLINSON: I put down this Amendment with my hon. and learned Friend because it was suggested to me by a Member of the Bar who has gone into it very carefully. The first point made by the right hon. Baronet the Member for the City (Sir F. Banbury) is dealt with by a, subsequent Amendment. The second point is that supposing an income is left to the child for 21 years and afterwards somebody else and never comes back to the settlor at all and is never meant to do so, surely that ought not to come in under this section. I am not in the least against the Clause as far as its whole scope is concerned, but I am raising points which have been put to me by a brother Member of the Bar and which may arise in practice. The-wording of the Clause as it stands is: clearly wrong and I hope the cases, instanced by the right hon. Baronet the Member for the City of London (Sir F. Banbury) and others will be taken into account by the Government. The real test is, does the man permanently devise the whole of the profit in the money that is settled. I hope these matters will be brought within the scope of the Clause.

Mr. D. HERBERT: May I put a very short illustration to the right hon. Gentleman. A man has a son, a young married man with three or four children of tender years, up to the age of five. He says to the son, "I am prepared to make a settlement on you, providing you with enough money to educate those children until
they are twenty-one, the money then to go to those children." That will be a settlement for a period less than the life of that child, and when the time arrives it will not go back to the settlor, but will go on to another generation in the family. I am sure it is intended to meet such a case as that, and therefore I hope some such words as suggested will be accepted.

Sir R. HORNE: I think I may give my hon. Friends an assurance that as regards cases where a genuine disposition is made for all time, as far as the settlor is concerned, if there is any dubiety about the terms of the Clause, I shall be willing to add words making it clear. I think it is plain, however, that the words suggested in the Amendment would leave a loophole. While I cannot accept these words, I am prepared to consider the matter before the Report stage in the light of what has been argued.

Amendment, by leave, withdrawn.

Mr. INSKIP: I beg to move in Subsection (1), after the word "or" ["or by whom the disposition was made"], to insert the words" of the person if living."
I hope the Solicitor-General will accept this Amendment which raises a not unimportant point. Indeed, I do not know how any attempt will be made to meet it. In a settlement of this sort if made for less than the life of the child, the income is figured as the income of the person who makes the settlement. If a widow is left, is it to be aggregated with her income for the purpose of fixing Income Tax or Super-tax? Another difficulty arises where a man leaves the income of the estate to his wife for life, subject to her maintaining and educating the children, and the widow makes default. An Order is made in the Chancery Division every day by which in such cases so much is set aside, and the Income Tax is paid not according to the whole sum left, but according to the share appointed for each child.

Sir L. SCOTT: Although I am not sure whether it is the correct drafting, subject to that, I will accept the Amendment.

Amendment agreed to.

Mr. INSKIP: I beg to move, at the end of Sub-section (1), to insert the words
Provided that in cases under the above paragraph (c) income shall not be held to
include any income derived from capital Which is required by such disposition to be held on trust absolutely for the child at the end of any period less than the life of such child.
The hon. and learned Gentleman has consented to accept this Amendment.

Sir L. SCOTT: I understand that in principle these words express what we intended to incorporate, and, subject to considerations of drafting, we will accept it on Report if my hon. and learned Friend will now withdraw the Amendment.

Mr. INSKIP: I am willing to do what is most convenient to my hon. and learned Friend and the Committee. I do not, however, like all these matters left over from the Committee, as I and others interested may be away when they arise again. If in substance these words are acceptable, I would much sooner have them inserted now, and leave my hon. and learned Friend to alter them afterwards.

Mr. RAWLINSON: I must say I rather like the principle of getting words in now, but I want rather more than this on the Report stage, as the Chancellor of the Exchequer has promised me more.

Amendment agreed to.

Motion made, and Question proposed, "That the Clause, as amended, stand part of the Bill."

Sir D. MACLEAN: I wish to ask the Chancellor of the Exchequer how far he intends to go to-night. I have had experience of a good many Finance Bills, and I can congratulate the right hon. Gentleman on having made such satisfactory progress. There have been a large number of contentious Clauses, and many more contentious matters could easily have been raised. He has been extremely courteous, and we have done our best to help him. I think he might be satisfied with the progress already made.

Sir R. HORNE: As my right hon. Friend knows, last night we discussed this topic at a similar hour, and came to an arrangement by which it was perfectly well understood that we should complete the Committee stage of this Bill in four days, and that, in particular we should get to Clause 27 to-night. While I am not anxious to keep the Committee sitting longer than expediency requires, at the same time we must assure ourselves
of getting the Bill through in the appropriate time, and I should think it is possible to conclude Part II before rising to-night. That would be rather fewer Clauses than we agreed to take. At any rate, I do hope the Committee will make further progress before we adjourn tonight.

Clause, as amended, ordered to stand part of the Bill.

CLAUSE 14.—(Super-tax on undistributed income of certain companies.)

(1) Where it appears to the Special Commissioners that any company to which this Section applies has not, within a reasonable time after the end of any year or other period ending on any date subsequent to the fifth day of April nineteen hundred and twenty-one, for which accounts have been made up, distributed to its members in such manner as to render the amount distributed liable to be included in the statements to be made by the members of the company of their total income for the purposes of Super-tax, a reasonable proportion, regard being had to the normal requirements of the business, of its actual income from all sources for the said year or other period, the Commissioners may, by notice in writing to the company, direct that for purposes of assessment to Super-tax, the said income of the company shall, for the year or other period specified in the notice be deemed to be the income of the members, and the amount thereof shall be apportioned among the members.
(2) Any Super-tax chargeable under this Section in respect of the amount of the income of the company apportioned to any member of the company, shall be assessed upon that member in the name of the company, and, subject as hereinafter provided, shall be payable by the company, and all the provisions of the Income Tax Acts and any Regulations made thereunder relating to Super-tax assessments and the collection and recovery of Super-tax shall, with any necessary modification, apply to Super-tax assessments and to the collection and recovery of Super-tax charged under this Section.
(3) A notice of charge to Super-tax under this Section shall in the first instance be served on the member of the company on whom the tax is assessed, and if that member does not within twenty-one days from the date of the notice elect to pay the tax a notice of charge shall be served on the company and the tax shall thereupon become payable by the company:
Provided that nothing in this Sub-section shall prejudice the right to recover from the company the Super-tax charged in respect of any member who has elected as aforesaid but who fails to pay the tax by the first day of January in the year of assessment or within twenty-one days of the date on which he so elected, whichever is later.
(4) Any undistributed profits which have been assessed and charged to Super-tax
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under this Section shall when subsequently distributed be deemed not to form part of the total income from all sources for the purposes of Super-tax of any individual entitled thereto.
Where a member of a company has been assessed to and has paid Super-tax otherwise than under this Section in respect of any income which has also been assessed and upon which Super-tax has been paid under this Section, he shall, on proof to the satisfaction of the Special Commissioners of the double assessment, be entitled to repayment of so much of the Super-tax so paid by him as was attributable to the inclusion in his total income from all sources of the first-mentioned income.
(5) This Section shall apply to any company—

(a) which is registered under the Companies Acts, 1908 to 1917; and
(b) in which the number of shareholders computed as hereinafter provided is not more than fifty; and
(c) which has not issued any of its shares as a result of a public invitation to subscribe for shares.

In computing the number of shareholders of a company for the purpose of the foregoing provision there shall be excluded any shareholder who is not a beneficial owner of shares or who is an employee of the company, or is the wife or the unmarried infant child of a beneficial owner of shares in the company.
(6) In this Section the expression "member" shall include any person having a share or interest in the capital or profits or income of a company, and the expression "employee" shall not include any governing director, managing director or director.
(7) The provisions contained in the First Schedule to this Act shall have effect as to the computation of the actual income from all sources of the company, the apportionment thereof amongst members of the company and otherwise for the purpose of carrying into effect, and in connection with, this Section.
(8) The provisions of this Section shall apply for the purposes of assessment to Super-tax for the year 1922–23 and any succeeding year of assessment.

The CHAIRMAN: The Amendment standing in the name of the hon. Member for Watford (Mr. D. Herbert) is not in order, but he has put in a revised version which would be in order.

Mr. D. HERBERT: I beg to move, in Sub-section (1), to leave out all the words after "it" ["Where it appears"] to the end of the Clause, and to insert instead thereof the words
is proved to the satisfaction of the Special Commissioners (but subject to appeal by either party to the courts, either on grounds of law or of fact, that a person liable to
Super-tax controls, or can control, either by himself or by nominees, three-fourths of the voting powers of a company of a private character registered under the Companies Acts 1908 to 1917, and that such company, after making reasonable provision for depreciation or reserves or replacement of wasting assets, is refraining from distributing income so as to render immune from Super-tax income which could be reasonably and properly laid to such person, then such person shall none the less be liable to be assessed to and to pay Super-tax in respect of such amount as he would have received from such company if such company had not so refrained from distributing such income as could have been so reasonably paid as aforesaid.
The alteration which has been made in the Amendment to put it technically in order is that the words "of a private character registered under the Companies Acts 1908 to 1917" have been substituted for the words "whether incorporated in the United Kingdom or incorporated abroad." I must frankly confess that the alteration which I have been obliged to make to bring the Amendment in order takes away practically the whole point of my suggested Amendment, but I make the alteration with a view to being able to discuss certain points arising upon this Clause which appear to me to be of very great importance, and to which I referred on the Second Reading of the Finance Bill. Clause 14, as drawn, deals with companies registered in this country alone, and the Money Resolution, upon which this Clause is founded, is also confined to companies registered in this country, and companies of a private character registered in this country. Therefore, I was obliged to alter my Amendment, but the whole object was to meet the point that people who are forming companies of this kind in order to avoid Super-tax would defeat the purpose of the Government by registering those companies abroad. You cannot effectively legislate against a foreign company, any more than you can effectively legislate against a person who is a citizen of and resident in a foreign country. If you want to hit these particular people, and prevent their escaping the tax, you must direct your legislation not against companies that are registered but against the men themselves.
A parallel case arose in, I think, 1912, when an alteration was made in the
Income Tax law with reference to dividends on foreign property not brought to this country. Prior to that year a number of people had invested moneys in different parts of the world. For example, they invested money in Canada and they had the income collected by a Canadian bank and placed to a special savings bank account and accumulated, so that it was never brought to this country, and under the law as it then stood it was not liable to Income Tax and the taxpayer did not pay it. The Government, in order to prevent the loss of tax resulting from that course of action, legislated to the effect that every Income Tax payer, who was, of course, bound to divulge all his income, wherever it might be situated, should be liable to pay Income Tax on these dividends even though they were never brought to this country. People might say at first sight: "If you are going to tax a man on money that he may never bring to this country, how are you going to collect the tax?" In practice the answer is very simple. The man is over here, he is getting money to live upon—to live in some state of at least moderate luxury —and every penny which he gets in this country you can recover from him if you have a just, proper and effective judgment against him; and so can you do it in the case of the man who registers a company abroad and accumulates income abroad in order to get out of Super-tax. I respectfully suggest that the course which the Government ought to have adopted, and which, I take it, it is now out of their power to adopt on account of the terms of their Ways and Means Resolution, was to legislate against the Super-tax payer and to say that any man liable to pay Super-tax who controls in an objectionable way a company, whether in this country or abroad, so as to render what should be his income immune from Super-tax, shall, nevertheless, be liable to pay it. That, I believe, would be effective.
That raises other questions (which were discussed to some extent on the Second Reading of the Bill) as to the danger of the Clause as it stands at present. I know, and I have no doubt that the Committee generally can believe, that the Government by this Clause had no intention of trying to act harshly towards those one-man companies, or private companies, which have been formed for the genuine
purpose of carrying on some trade or business and in order to enjoy all the advantages which the Joint Stock Acts were passed for the purpose of conferring on a limited liability company. On the one hand, there are a number of cases where people are unfairly accumulating their profits and escaping Super-tax in a way which they ought not to do; but it is extremely difficult to differentiate those cases from the cases of small trading companies existing, perhaps, largely on borrowed capital, and bound, if their trade is to progress—indeed if their business is to be made reasonably safe—to put aside and accumulate almost the whole of their profit, except the small amount needed for the proprietors to live upon. I am going to be so bold as to make a suggestion to the Government with regard to those cases. It is my firm opinion that the Government, bound as they are by the Ways and Means Resolution, and quite unable to hit the man who chooses to register a trust company abroad will find it impossible to attain in any degree the object which they have sought in this Clause. In view of the great danger which there is of their interfering unduly with other trading companies, doing a considerable amount of damage to the trade of the country, and perhaps reducing the amount upon which Income Tax generally will be assessed, I seriously suggest to them that it is a matter for their consideration whether they ought not to withdraw this Clause altogether this year, with a view to bringing in another, as soon as they can do it, based upon a money Resolution sufficiently broad to hit the person they really want to hit, the man who is forming a trust company in order to get out of Super-tax, a man not engaged in trade or business at all, and who, directly this is passed, will laugh at it by going and registering his company abroad. If they will only bring in legislation drafted somewhat on the lines of my Amendment as it originally stood, they will be able to hit the man who is the particular man they want to catch.
I only want to say, in conclusion, that my Amendment as originally drawn was drafted very loosely, and was intended merely to indicate the lines upon which I thought legislation of this kind should go. I do not for a moment suggest that in its details it is a sufficiently finished Clause, but I do say that until you can hit the
man who makes use of a foreign company your Clause is absolutely worthless, and, in the meantime, is extremely dangerous and likely to be unfairly oppressive on the trade of the country in a manner that was not intended. I earnestly ask the Government whether, under all the circumstances, they will not withdraw this particular Clause for this year, if it is impossible to introduce any Ways and Means Resolution on which to found legislation which will hit a foreign company.

Mr. A. M. SAMUEL: I, too, think this Clause will have to be withdrawn, and for reasons other than those given by my hon. Friend the Member for Watford (Mr. D. Herbert). Let me show the Committee what the position is at the present moment. There are 78,000 registered companies in this country, of which 60,000 are private companies, and in the case of all those which have less than 50 members it will he in the power of the Special Commissioners to say what each shall put to reserve, or to depreciation or keep back for wasting assets, or what they shall do in other matters which are of an intimate and expert nature in the conduct of their business; and if what the Special Commissioners say is not done it will lie in the power of the Special Commissioners to penalise those companies by inflicting, as a penalty beyond the Corporation Profits Tax, the Super-tax. That goes behind the clear intention of the Government in telling us some year or two ago that Corporation Profits Tax would be put upon companies because they did not pay Super-tax. It is thus to be within the power of the Special Commissioners to penalise some of these companies. For what reason is this Clause to be operative? There is evidence that certain people have been able to take an advantage—not an illegal advantage, because they are within their legal rights, for, as my hon. and learned Friend the Member for Central Bristol (Mr. Inkskip) said, it is not illegal to do it—have been able to get through a gap in the fence and have become immune from a certain form of taxation.
I wish to say here and now, on behalf of the body with which I have the honour to be identified, the Association of British Chambers of Commerce, that we support the Chancellor of the Exchequer
in the principle laid down in this Clause and we will help him all we can, but we cannot take this Clause as it stands, because it is not workable in its present form and the result will be that it will do more harm than good and great injustice. I am very glad to be able to say that we will support the Chancellor in the principle, because when an injustice has been done to us as traders in the past and we have gone to the Chancellor of the Exchequer to ask for a grievance to be remedied—I have been on many occasions on deputations to the Treasury during the last seven years—the Chancellor of the Exchequer of the day has always met us fairly, so far as lay in his power. We ask on various occasions for equity; we on our part must do equity. AB fair play has not been given to the revenue by reason of this gap, we are prepared to help the Chancellor of the Exchequer to stop a tax leakage arising from a defect in legislation, so that when we go to him again to ask for a grievance to be remedied we can say to him: "When there was a grievance against us on the part of the Treasury we helped you." The Clause itself contains indications of hasty draftsmanship, and elements which must defeat its usefulness quite apart from the point made by the hon. Member for Watford as to companies being registered abroad. The Clause talks about "members" of a company who will be called upon to pay Super-tax, but how can the Revenue call upon a "member" to pay Super-tax if that "member" is a limited liability company? Some of these small companies may have shareholders who themselves are limited liability companies, and you cannot as the law now stands, get the Super-tax from a limited company. You have to get the man who is the end of the funnel out of which the money comes: but while you have a limited liability company holding shares in a company of less than 50 people this Clause is utterly defeated. That is a point that will have to be dealt with.
The next point that may arise is that a proprietor may be of such small means that he does not pay Super-tax. How, then, is Super-tax to be got from him? Or, again, at what rate if he is liable for a rate lower than that claimable from the originating company liable under this Clause? Or it may be that no
money has been distributed, and that no money is in the hands of the company, and if Super-tax is charged by the Special Commissioners, how is the Super-tax to be paid? If the company is called upon to pay money for a shareholder it will make it in the form of a payment to one of its proprietors, and that will be a payment out of capital and will offend the law. How is that difficulty met? There are three or four different points in the Clause which in themselves defeat its efficiency. In any case, to allow the Special Commissioners to say to trading people, because they happen to be a company of fewer than 50 persons, what they may put away for reserves, contingencies, fighting funds, and for wasting assets, is something which the trading community of this country cannot allow to pass without the most violent protest. You do not say to J. and P. Coats, to Brunner, Mond and Company, to an oil company, or to the P. and O. Company how many thousands of pounds they may put away for reserves against contingencies which none but those working the concerns can understand. Take the case of a ship-owning company with the small number of, say, 10 members. Suppose there is a prospect of a freight war five years hence, and that ship-owning company does not distribute its profit, but keeps it carefully in reserve for the purpose of fighting for its life when the time comes. Is it to be in the power of the Special Commissioners to say, "You have got to put what we think proper into your profits and call them divisible profits and pay Super-tax"? It is an intolerable state of affairs, and cannot possibly be permitted. Moreover, it means in effect that Special Commissioners, who cannot possibly know the intricacies or the future policy or apprehensions of a prudently-managed concern, are to dominate its rate of dividend and reserve and financial systems. Is that the intention of the Treasury? I am sure it cannot be; but that is what will eventually occur. Yet the very basis of our sound commercial system is the keeping back of profits for reserves over many years. This Clause contests and discourages that policy of prudence and strength. In times like these, when high taxation bears very heavily upon us, grievances have become more formidable than when taxation was low. We hold that the principle in this Clause is right, but we can-
not support it in its detailed form. And for the reasons given, I have put down an Amendment that we should insert in Sub-section (1)—these words were arrived at after very careful consideration by some of the leading industrial men of this country who met together on several occasions for the purpose of assisting the Chancellor of the Exchequer in this specific matter by devising a formula to effect his aim without doing damage to those whom the Clause is not aimed at. I think the words of my Amendment express the principle and the spirit of what the Chancellor of the Exchequer wishes "for the purpose of avoiding or diminishing the liability of its shareholders to Super-tax." That is what the Chancellor aims at. But the trouble is—to avoid injury to innocent people.
If the Government can prove that any company, to use a colloquialism, is tax-dodging by means of a gap in the revenue fence the Treasury has a right to come down and frame a law to stop this gap and take tax on that which is till now permissibly put aside, after the legislative permission has been given in suitable form. These words are not put down as an Amendment at random. May I read an extract, which guided us, from paragraph 575, page 125, of the Report of the Royal Commission on Income Tax, 1920:
The problem can be handled in two ways. It could be enacted that the undistributed profits of a company should be allocated among the shareholders, and regarded for Super-tax purposes as their income; alternatively, the undistributed profits of a company could he made liable to a special counterbalancing tax. Any universal application of either of these solutions would be open to considerable objections, and would apply to cases where there is no reason to suppose any avoidance of Super-tax is intended. We accordingly recommend that when assessing authorities are satisfied that the profits of a company or a portion of them are retained undistributed or are distributed as bonus shares for the purpose of avoiding or diminishing the liability of its shareholders to Super-tax, the income of those shareholders may be treated as if the profits or a portion of them had actually been distributed as an ordinary dividend.
The words of that Report have been adopted by us in this Amendment. I will go further and say that we are not alone in using these words. I hold in my hand an Act, 9–10, Geo. V, to amend the Income War Tax Act, 1917, with the advice and consent of the Senate and House of Commons of Canada, and the same words
are used which I want to urge upon the Chancellor of the Exchequer:
The share of a taxpayer in the undivided or undistributed gains and profits of a corporation shall not be deemed to he taxable income of the taxpayer unless the Minister is of opinion that the accumulation of such undivided and undistributed gains and profits is made for the purpose of evading the tax, and is in excess of what is reasonably required for the purposes of the business.
It appears, therefore, that if we ask the Chancellor of the Exchequer to withdraw this Clause, to reconsider it in the light of what the hon. Member for Watford has said and in the light of what I have ventured to lay before the Committee, I think then we shall get nearer to attain the object which the Chancellor of the Exchequer has in view. I hope he may think fit to make some statement to-night to meet our wishes, and if he does endeavour to frame a new Clause of a kind which will avoid the objections I have mentioned, he can depend upon getting the support of those who think with me in this matter.

Sir R. HORNE: I do not think the Committee is under any misapprehension as to the object with which the Government has presented the proposal to the House of Commons. The conditions, I think, are now well known. It is possible under our laws for individuals to form private companies by which, within the provisions of the law relating to these private companies, they need publish no balance sheet to the world. They preserved practically all the secrecy they would have as private partnerships, and enable the persons chiefly interested to put to reserve much of the profit, indeed, all the profit, if thought fit, and entirely escape the payment of Super-tax upon profits which other individuals and private partnerships are required to pay. It is possible, under these conditions, to get full advantage of the reserves so set aside by borrowing from the company. It is also possible to bring the company to an end at any period chosen, and put all the reserves in their pockets without without having paid any Super-tax upon those funds. It is perfectly obvious, and I am sure every Member of the Committee agrees, that that is a device we must be put in a true position to avoid. The only difficulty I see is that of finding the proper means to meet that kind of measure. I think it would be a pity if
the Committee were to ask me to defer legislation for a year upon such a matter as this, because it has become particularly prominent in recent times. It has become notorious that professional people are advising, as they are entitled to advise as the law is to-day, to adopt this device, and bankers are giving the same advice.
The matter, a short ago, did not assume any great proportions; to-day it is one of very formidable dimensions. Therefore, we should wish to deal with it at the earliest possible moment. That is why the present Clause is before the Committee now. I do not say for a moment that we have found the best way of dealing with it. We have had a sufficient expression of opinion both by the Amendments put upon the Paper and from certain hon. Members to enable us, without delaying for a year, to present to the Committee a solution of the problem. The hon. Member for Watford (Mr. D. Herbert) has suggested that our Clause is nugatory in respect that it does not deal with the possibility of individuals trading through companies abroad, and registered under the laws of foreign countries instead of those of Great Britain. I dare say that is possible and, indeed, may be likely in certain circumstances, but I do not think we should be deterred from legislation at the present time on the ground merely that we are not able to deal with people who adopt that device. It is a quite possible device, I admit, but there is a natural disinclination even on the part of people who wish to evade their tax to set up companies abroad. It is an overt act of a particular and obvious ostentatious character, and most people shrink from making so public a demonstration of what they are seeking to attain. I have no doubt the instance to which my hon. Friend referred was one where the person who set up the company abroad had acquaintance with the land in which the company was formed.

Mr. D. HERBERT: There was one particular company I referred to, but that was ancient history, some 12 years ago. The companies I have in my mind were purely private trust companies, not carrying on trade, the details of which are private and which will be moved
abroad without other people knowing anything about it.

Sir R. HORNE: At any rate, there are a great many other companies of which we know to which that description might be given, and I think it is quite worth while even although we do not cover all the possible loopholes. We can get at some of them now by legislation and it is worth while. The proposals which have been made for amendment indicate the lines upon which the minds of certain Members have been running as to the methods which should be taken to get rid of this difficulty. The hon. Member who has just sat down has referred to some of these, and he has indicated what is perfectly known that there might be great apprehensions on the part of the trading community if they were to be subjected to investigations which were annoying and irritating and might result in some process of investigation and indeed of appeal. I entirely agree that is an apprehension that might justify itself, and he suggests, as an alternative, that we should use words which would show that all we desire to do is to get at these people who form their companies for evading their liability of assessment to Super-tax. Speaking with some experience of the Law Courts, I cannot imagine any phrase with more difficulty. One of the oldest maxims in the law is that you cannot try a man's mind. You cannot get inside a man's mind to say what his motive is. There is nothing which a man can so readily evade as a disclosure of what his motive was. You cannot really arrive in any clearness or conclusiveness at what a man's motive was. Is there anybody in this country who would put it into the hands of the Minister to say that a certain person was or was not seeking to evade his proper duty?

Mr. A. M. SAMUEL: You have put this into the hands of special commissioners.

1.0 A.M.

Sir R. HORNE: That is just the distinction between what my hon. Friend has suggested and what we propose. He proceeds by way of assessing men's motives. The method by which we propose to deal with this matter is to take cakes in which funds have been accumulated which, in the ordinary way, might readily have been distributed and say in such cases that an unreasonable propor-
tion of the funds has been put to reserve fund. It is a definite fact and not an attempt to assess a man's motive, and I am ready to suggest that the method is far surer than that proposed by the hon. Member. Now, take another of the suggestions which have been put upon the Paper.

Mr. SAMUEL: What is the right hon. Gentleman's objection to the Canadian method?

Sir R. HORNE: The Canadian method puts it upon the Minister to say whether a particular man has done what he has done with a view to evading the tax. It would be much easier to decide upon the lines which the Government has suggested. Take the next suggestion which has been made as an alternative, that we should insert words to apply it only to a company not formed or carried on for bonâ fide trade purposes. That can be evaded in the easiest fashion possible. Take the case of a man carrying on business by a private limited company. He carries on the business that he previously carried on, but he would evade it entirely because he would say, "I am carrying on a bonâ fide trading business," and, of course, it would be so. The whole point is that he would not be carrying it on in the way in which he would be doing if a private individual with obligations to the State. He would entirely defeat the phraseology which it is sought to insert in the Bill.
We looked at the matter from various points of view, and I do not profess that it is the best phraseology, but I have the various suggestions before me, and I have taken advantage of the many proposals made in the Amendments on the Paper. In particular, there are suggestions with regard to purposes for which funds might be set aside. I confess quite frankly to the Committee that I am not in a position to put before it in any kind of form the suggestions before the Report stage. I am reluctant to delay to the Report stage any matters with which I can deal now, but we are dealing here with rather novel proposals and suggestions which must be very carefully scrutinised before we come to a final conclusion upon them, and I hope the Committee will forgive me if I do not at the present time put before hon. Members the final words which the Government
would seek to use in order to give effect to their object. Perhaps they would take from me the assurance that the whole aim of the Government is to catch the man who is really seeking to evade the tax. We are very anxious to do nothing and to use no words in any Act of Parliament of which any business man can be apprehensive. For example, as indicating the course of my mind on this subject there is an Amendment on the Paper by the Member for North East Derbyshire (Mr. Holmes), which would allow companies, in the first place, to obtain a certificate from a reputable firm of chartered accountants, who would be permitted to give evidence that they were not doing anything which was contrary to the spirit of the legislation in this matter. That proposal I would be quite willing to accept if that would meet the views of the business men. [HON. MEMBERS: "No!"] If that would alleviate any anxiety I certainly would be prepared to go as far as that, but if that is not thought to be sufficient, I may say that my mind is perfectly open upon the matter.

Mr. SAMUEL: Suppose we were willing to admit that amelioration, how would it meet the case of a small ship-owning company which reserves the whole of its profits in order to defend itself against a rate war by another country? No auditor would dare say that that was a normal reservation. Or take my own trade. Suppose I say that, as there is a new set of fashions coming out, I will scrap the whole of my patents. No auditor would allow me to wipe out all that in one year. Would you consider that a proper excuse for me not being called upon to pay Super-tax? If you wish to test a difficult point, take its logical conclusion. These are the difficult questions upon which the whole of our objection to the working of Clause 14 rests. In a normal case the auditor's certificate would do quite well, but it is in the abnormal cases that the difficulty would come in.

Sir R. HORNE: I am prepared to give my own opinion on that now, and I should not hesitate at all to give latitude to a firm which is building up a reserve fund either to meet competition which it foresaw or in the case of a shipping company by which a larger fleet could be secured. These are quite ordinary legitimate business purposes known to be practised by many of the enterprising business people
of this country. These things do not seem to me to be abnormal at all, but I am prepared to drop the word "normal" out of the Clause, because I quite see that if it gives a limiting effect I should not desire to do that. I am prepared to drop that out and to put in words which would make it perfectly legitimate for firms to do everything in their power in the way of putting past reserves for what may be called the maintenance, development, or extension of the business, or any words which would give extreme latitude for a legitimate purpose upon which success depends. But I am not in a position to put a final form of words before the Committee to-night. Perhaps my statement may be regarded as giving sufficient assurance with regard to most of the Amendments on the Paper. If the Committee would be so good as to allow me to have the Clause as it stands, I give the assurance that I shall put before the House on Report a form of words which by that time I shall have ready for the consideration of Members of the House.

Mr. D. HERBERT: I want to make this suggestion to see if the right hon. Gentleman can go a little further. There are considerable difficulties in discussing what is practically a new Clause for the first time on the Report stage. I am going to ask the right hon. Gentleman whether it would be possible for him to prepare for consideration some Clause which might come at the end on the last day on which the Bill is being considered in Committee.

Sir R. HORNE: I shall be very willing indeed. I recognise the difficulty in which I am putting Members, and I am very anxious to make any arrangement which will facilitate their acquiring a proper knowledge of the proposals and being ready to discuss them.

Mr. G. LOCKER-LAMPSON: There are other points in the Clause than those that have been discussed.

Sir R. HORNE: I have indicated how many of the Amendments on the Paper would be covered by the proposal which I have made.

Mr. MACQUISTEN: I regard this Clause with the greatest possible apprehension. It is only a beginning. It is all very well for the Chancellor of the
Exchequer to tell us that the law would never dream of trying a man's mind. That is exactly what the Clause is intended to do. He told us, on the one hand, that he wants to get at those people who are making Super-tax, and, on the other hand, he has not the courage to say that that is the purpose of the Clause. He must either do that or he is framing a Clause which is going to take in thousands of innocent people. He is going to fire grape shot into the crowd of innocent and guilty alike He will not get a Clause that will only hit those who are evading Super-tax. That is beyond the wit of man. The Clause is not clear. It begins by saying that "where it appears to the Special Commissioners" that a company is not distributing a reasonable proportion. The question of what is a reasonable proportion is left to the Special Commissioners. There is still the question of fact: What is a reasonable proportion? No one knows what a reasonable proportion is. In Scotland, under the Food Control, when certain people were being prosecuted for having more than a reasonable quantity of butter in their possession, the accused objected to the relevancy of the complaint on the ground that there was no definition under the Food Controller's Order of what was reasonable, and they did not know what they had to plead to, and a man must know when he was committing a crime. Therefore, unless there is a definition of what is reasonable no relevant offence can be charged. It is not clear here when it is the Special Commissioners who decide what is reasonable. In the first place, the question will be decided by a Government official, and if there he any human being in Great Britain less qualified to decide what is a reasonable thing, it is the average Government official. He is not a commercial man at all. How can he possibly tell the multifarious businesses in this country what is reasonable? The cases which have called attention to this particular thing are said to be cases of certain landed proprietors.

Sir R. HORNE: My hon. Friend is quite wrong.

Mr. MACQUISTEN: There has been cases of that kind brought to knowledge. Why do they do it? Simply because the allowances made are so small that it is
impossible for them to run their properties. If they had been allowed reasonable deductions these devices would not have occurred. If the Chancellor of the Exchequer attempts to frame a Clause, he must come into the open and put it in the Statute that his intention is to get at certain people who have the culpable intention of dodging Super-tax. He must have the courage to tell these people that they are doing something wrong. After all, is it to be a crime that a man saves money, that a man does not draw money out of a company, but uses it to develop his business? The Chancellor of the Exchequer said he would have every sympathy with a man putting past money for the developement of his business. What is that but a fresh investment? The man who is extending his business is investing money, and I am old-fashioned enough to believe that people who save money, and do not scatter it, are really benefactors to the rest of the community. I will call the attention of the Chancellor of the Exchequer to the system of the Dutch with their companies. They are, perhaps, the most thrifty and industrious race in Europe. Theme a company is never taxed upon its profits, but upon the dividend which it distributes. The whole purpose of modern taxation seems to be that if anybody has the audacity to make any money, or save any money, it is a serious offence against the body politic, and that he should be stripped of the money, and that large sums of it should be handed over to the Government to be expended on objects with which thrifty people do not usually agree. I believe that this Clause is a most pernicious Clause and that it is impossible for the Chancellor of the Exchequer to devise the kind of Clause he wants unless he comes out into the open. There are people who would easily find other devices for evading their obligations. It would be perfectly easy to register one company as holding shares in another, and it would be easy to have a trust company abroad, while all the time the Clause would be inflicting an intolerable interference on a vast mass of honest traders who are bearing their burdens and doing what is perfectly right. These are the people who will be hit and not the people the Chancellor of the Exchequer is endeavouring to bring down.

Sir HALFORD MACKINDER: I want to appeal to the Chancellor of the Ex-
chequer in this matter, and I am speaking on behalf of a number of the most important firms in Scotland, who have been giving close attention to this matter during the last 10 days. They, in common with those for whom the hon. Member for Farnham (Mr. A. M. Samuel) spoke just now, are absolutely in sympathy with the Chancellor of the Exchequer in the object he has in view, as declared by him in his Budget speech. They will do everything they possibly can to help, but they feel that you may do more harm in attempting to catch the culprits than if you let them go free. Let me put only one single case; it is a case that is very present to the City of Glasgow. Supposing it is thought by certain ship-owners that within the next few years there will be such discoveries in regard to the propulsion of ships as will lead to the reconstruction of the mercantile marine of this country. That would be a matter for which they must lay by large sums of money. If they are great concerns that have been operating for more than a generation past, they will probably have enormous hidden reserves upon which they may draw, and they have large credit in the market; but there are small companies owning just a few ships, companies which are private companies, and therefore companies which will be hit by this Clause. These small companies are precisely the type of companies which, if their directors have wisdom, will put by large sums of money if they believe in this invention coming, in order that they may hold their own and not be caught unawares, like the foolish virgins. The question which my friends in Glasgow have been addressing their minds to is how you are to distinguish a company that ought not to be hampered from the company which you ought to attack. Their feeling is very strong that, somehow or other, it must be done by segregating this kind of company; that you must not pass in review, or attempt to pass in review, or take power to pass in review, 60,000 companies; because that is what this Clause does.
I am perfectly ready to accept the assurance, which I have no doubt will be given by the right hon. Gentleman, that it is not his intention to harry bonâ fide trading companies, but to deal only with certain cases which are well-known to the Treasury. That may be so, but you are
putting a law on the Statute Book and the Board of Inland Revenue is a Pharaoh that may not know Joseph, a Pharaoh with perpetual succession. It has many moods, and the mood, when the right hon. Gentleman has gone and some other Government is in power, may lead to a quite different application of the law, and the law as you have it proposed in this Clause is to give power to the Special Commissioners to pass in review the whole of the private companies of this country. The hon. Member for North-East Derbyshire (Mr. Holmes) has an Amendment down which seems to find favour with the Chancellor of the Exchequer. I agree that that Amendment is far better than the Clause as it stands, but even as regards that Amendment I draw attention to the fact that it will almost inevitably lead to every private company—I do not say every public company—as a matter of form and as a matter of custom attaching to its audit a certificate to cover this Act, if the Bill becomes an Act. That proceeding will become a mere formality.
The Government take the power to appeal, and in all cases where there is any suspicion an appeal will take place. The Commissioners will not be satisfied with the audit of some of the auditors, especially in dealing with some of the smaller companies, and the result will be that starting from a condition of things in which you will accept the vast majority of the certificates which will be forthcoming you will very soon get more and more suspicion on the part of the bureaucracy and you will get a capricious system of appealing which will lead to a great deal of harrying and a great deal of discontent and will, I think, do a great deal of harm. It is this fear which has led the companies with whom I have been in communication in the last few days to feel that it is only by distinguishing the kind of company that you really want to get at that you will be able to do what you want without causing a great deal of trouble, a great deal of bureaucratic routine, and, possibly, a very great deal of harm.
I have put down an Amendment to another part of the Clause. That may not cover all that is necessary, there may be loop-holes in it, but at any rate it indicates the kind of thing we desire. The effect of that Amendment is to add a fourth condition. You would deal not
only with private companies as defined under (a), (b), (c), but there would be a paragraph (d) in which it would be laid down that it applied to companies of not more than three shareholders, being individuals, owning or controlling three-fourths of the voting power of the company. I agree that it may be difficult to ascertain where control exists and where it does not exist. All that Amendment is put down for is to bring before the Chancellor of the Exchequer the very strong opinion which has been formed by great firms, well qualified to investigate this matter, and far removed from any suspicion of being within the category that the right hon. Gentleman wishes to reach. It registers their feeling that you must have a limiting condition which will reduce the total of 60,000 to a very small number of firms to be investigated.
There is one method by which, it seems to me, you might attack this problem, and that is the general method of the Amendment which is now under discussion. That Amendment does not, in the first instance, go for the company at all, it goes for the individual. That Amendment starts with the words
Where it is proved to the satisfaction of the Special Commissioners that a person liable to Super-tax controls or can control either by himself or by nominees three-fourths of the voting power of the company—".
In the first instance, you do not pass under review a company, but you pass under a review a person, and where you have reason to believe that a person is liable to Super-Tax, and you have reason to believe that that person controls a company, then you have got a case to investigate, and there is no need to pass in review great numbers of quite innocent and quite immaterial cases. I commend to the Chancellor of the Exchequer that, when he is drafting his new proposals which he has promised to put before us, he should remember that there will be considerable opposition to and considerable criticism of any method which is based upon the investigation of accounts, even if you accept the criticism of an auditor, and that the only system which will really give satisfaction, if ho can find it, is a system which either narrows down the companies to be investigated to some small category, or, alternatively, does what this Amendment in a rough and ready way attempts to
do, namely, singles out individuals and then investigates the companies which may be controlled by those individuals.

Sir R. HORNE: Perhaps the Committee will now allow me to make a suggestion, in order to save time. If all those who have put down Amendments would consent to withdraw the Amendments and allow us to come to the question of whether the Clause shall stand part of the Bill or not, we will then negative the Clause, and I will present a new Clause at the last part of the Committee stage.

Mr. STURROCK: May I ask the right hon. Gentleman whether he will be so good as to indicate to the Committee in a general way something of the nature of this new Clause?

Sir R. HORNE: I am afraid I have already taken up considerable time, and I hope that something of what I have already said has indicated that.

Mr. SAMUEL SAMUEL: This is a very serious matter to the commercial community, for it has been suggested by nearly all the speakers that the commercial community as a whole is a party to what you might, call a fraud on the revenue. [HON. MEMBERS: "No!"] Well, it assumes that all private companies have been attempting to escape Super-tax, whereas as a matter of fact a great many of those companies were established—and others will continue to be established in the future, if we wish the business of the country to go on—for purely financial reasons. It is a well-known fact that private companies of one, two, and three people are very often established at the instigation of their banks. When they go to the bank to borrow money the bank requires security, and mortgage is not a security that all bankers like, and sometimes the borrowers are asked to form a limited liability company and to issue debentures as security for loans which they are going to take up. A bank does not invest in debentures as industrial enterprises do. They require the directors of the company to give an undertaking for the redemption of their debentures, and it is very often the case it is essential that they should make a plan for the redemption of those debentures. If you are going to do away with the necessary facilities that they have had in the past
for the redemption out of profits of these debentures, you are going to shut up half the private companies that exist in this country and to prevent any expansion of trade, do away with any revival of trade and the resumption of normal conditions in this country. I wish to warn the Chancellor of the Exchequer that the principles of this Clause are most dangerous to the commerce of the country.

Mr. HUGH EDWARDS: May I ask my right hon. Friend whether we are to assume that this new Clause which he will draft will be based on the criticisms and the suggestions made here this evening?

Sir R. HORNE: I shall try to meet them.

Sir NORMAN RAE: The criticisms have been limited to very few speakers. There are other lines of thought which can he suggested by some who have not spoken. The hon. Member for Camlachie (Glasgow) (Sir H. Mackinder) says you have got individual concerns where the direction of these concerns is, practically speaking, vested in one person. He suggests that these companies should be dealt with in a different way. But there are many companies in this country with shareholders where the direction is as much in the hands of one man as a private concern, and ought not to have that different recognition in the way which has been suggested.

Mr. NEIL MACLEAN: One would have thought that the Clause that has been put forward by the Chancellor of the Exchequer would have received considerable support from a large number of Members of this Committee who desire at this time to see the Government get the money required, and get it particularly from those places where the most money is to be obtained. The Chancellor of the Exchequer, evidently yielding to the speeches which have been made from different Members in the Committee who have Amendments down to this Clause, yielding is now willing that the Clause should be negatived and promises to introduce another Clause which, no doubt, will contain certain sentences calculated to meet some of the objections that have been urged against the Clause as it is at present. To me that seems rather peculiar on the part of the Chancellor of the Exchequer. We have been discussing the Bill now for practically one
might say, counting the time that has been taken on this matter, three days of the House of Commons week, and many Amendments have been put to various parts of the Bill pointing out hardships considerably greater than any of the hardships that must bear upon those forming companies. Yet the Chancellor of the Exchequer has not yielded one inch and has resisted the appeals which have been made on behalf of the poorer people of the community. But now, in the House of Commons at half past one in the morning, he can agree to the pressure that has been placed upon him and his Department by the rich men of this House. [An HON. MEMBER: "By those who create employment!"] By those who take the surplus part of the wealth of those who work, who made their money out of the War. [An HON. MEMBER: "What were you doing during the War?"] I did more for the country during the War than the men who made fortunes out of it. I tried to stop it, and that was more than some of the profiteers did. The Chancellor of the Exchequer have listened to speeches from these benches of the protest that this Budget is a rich man's Budget. The very fact that the Chancellor of the Exchequer has yielded to pressure to-night indicates that we were correct in dubbing it the rich man's Budget. The evasion of Income Tax has been raised. It has been circulated over the country that a Peer of the Realm forming a private company for himself with a supposed capital of £100,000 increases it with bonus shares by £200,000. If the total income has been for that year the £100,000 he has added to his capital, he would have paid in Income Tax and Super-tax something like £30,000. Yet he has escaped that, and the Chancellor of the Exchequer is now prepared to withdraw this Clause. The position I take up in this matter is that the Clause should be kept before the House if the Chancellor of the Exchequer requires the money which he says he does to carry on the affairs of the country. He cannot allow even the small sums that he is going to get in duties to escape him. Let the Chancellor keep this Clause in operation and collect the money that he himself has admitted is being taken away from the Revenue of the country.

Mr. MACQUISTEN: This will not do it.

Mr. MACLEAN: It is remarkable how many budding Chancellors of the Exchequer we have in the House advising the Chancellor. [An HON. MEMBER: "What is your job going to be?"] My job will probably be the kind that will make your hair stand on end.

Sir HAROLD SMITH: If it stands like yours I would get it cut.

Mr. MACLEAN: If you had it cut you might let your brains escape. I hope the (chancellor of the Exchequer will not give way, and keep this Clause for a vote, when we will be able to see all the Members of this House who are interested in keeping these companies that are being formed practically for the purpose of evading the taxation of this country. We will then see the Members who support these companies in their evasion as their names are recorded in the Division List to-morrow morning. We on this side will challenge the withdrawal and press it to a division.

Mr. ACLAND: I think the Chancellor of the Exchequer has made an offer which, in fairness to himself, ought to be accepted in a reasonable time. I do not think we can ask him to withdraw the Clause now for consideration and go on at the same time with this Debate. I do not gather that the Chancellor of the Exchequer has pledged himself to a particular Amendment but to consider points that have been raised for his notice.

Mr. STURROCK: I voted yesterday in I do not know how many Divisions, I think 12, in complete support of the Finance Bill, and I must confess I do rather regret that the Chancellor of the Exchequer has withdrawn from the position taken up on this Clause. A great many exaggerated conceptions of the nature of the companies have been conjured up which have no foundation in fact. I would like to ask my right hon. Friend to give us some sort of a pledge, before giving away point after point on the Finance Bill, that in the new Clause which is now to be proposed the sense of the present Clause will remain, subject to any alteration he may think fit to make it more reasonable.

Sir R. HORNE: The object of the proposal will undoubtedly be the very same.

Amendment, by leave, withdrawn

Motion made, and Question put, "That the Clause stand part of the Bill."

The Committee divided: Ayes, 42; Noes, 160.

Division No. 161.]
AYES
[1.47 a.m.


Acland, Rt. Hon. Francis D
Hartshorn, Vernon
Roberts, Frederick O. (W. Bromwich)


Adamson, Rt. Hon. William
Hayday, Arthur
Royce, William Stapleton


Ammon, Charles George
Henderson, Rt. Hon. A. (Widnes)
Sexton, James


Banton, George
Henderson, Lt.-Col. V. L. (Tradeston)
Shaw, Thomas (Preston)


Barnes, Major H. (Newcastle, E.)
Hirst, G. H.
Sitch, Charles H.


Barrand, A. R.
John, William (Rhondda, West)
Spencer, George A.


Bell, James (Lancaster, Ormskirk)
Jones, J. J. (West Ham, Silvertown)
Sturrock, J. Leng


Broad, Thomas Tucker
Jones, Morgan (Caerphilly)
Sutton, John Edward


Brown, James (Ayr and Bute)
Lawson, John James
Waterson, A. E.


Davies, Evan (Ebbw Vale)
Lunn, William
Watts-Morgan, Lieut.-Col. D.


Davies, Rhys John (Westhoughton)
Maclean, Neil (Glasgow, Govan)
Wedgwood, Colonel Josiah C.


Edwards, C. (Monmouth, Bedwellty)
Mills, John Edmund



Graham, D. M. (Lanark, Hamilton)
Norris, Colonel Sir Henry G.
TELLERS FOR THE AYES.—


Grundy, T. W.
Parkinson, John Allen (Wigan)
Mr. T. Griffiths and Mr. Walter


Hall, F. (York, W. R., Normanton)
Raffan, Peter Wilson
Smith.


Halls, Walter






NOES.


Agg-Gardner, Sir James Tynte
Gilmour, Lieut.-Colonel Sir John
Pease, Rt. Hon. Herbert Pike


Amery, Rt. Hon. Leopold C. M. S.
Goff, Sir R. Park
Pennefather, De Fonblanque


Armitage, Robert
Gould, James C.
Percy, Lord Eustace (Hastings)


Armstrong, Henry Bruce
Green, Albert (Derby)
Perkins, Walter Frank


Astbury, Lieut.-Com. Frederick W.
Greene, Lt.-Col. Sir W. (Hack'y, N.)
Philipps, Sir Owen C. (Chester, City)


Atkey, A. R.
Greenwood, William (Stockport)
Pickering, Colonel Emil W.


Baird, Sir John Lawrence
Grenfell, Edward Charles
Pollock, Rt. Hon. Sir Ernest Murray


Baldwin, Rt. Hon. Stanley
Guest, Capt. Rt. Hon. Frederick E.
Rae, Sir Henry N.


Balfour, George (Hampstead)
Hacking, Captain Douglas H.
Raw, Lieutenant-Colonel Dr. N.


Barlow, Sir Montague
Hall, Lieut.-Col. Sir F. (Dulwich)
Reid, D. D.


Barnett, Major Richard W.
Hamilton, Sir George C.
Remer, J. R.


Barnston, Major Harry
Hannon, Patrick Joseph Henry
Richardson, Sir Alex. (Gravesend)


Bell, Lieut.-Col. W. C. H. (Devizes)
Harmsworth, C. B. (Bedford, Luton)
Richardson, Lt.-Col. Sir P. (Chertsey)


Betterton, Henry B.
Henderson, Lt.-Col. V. L. (Tradeston)
Robinson, S. (Brecon and Radnor)


Bigland, Alfred
Hennessy, Major J. R. G.
Samuel, A. M. (Surrey, Farnham)


Birchall, J. Dearman
Herbert, Dennis (Hertford, Watford)
Samuel, Samuel (W'dsworth, Putney)


Borwick, Major G. O.
Hinds, John
Sanders, Colonel Sir Robert Arthur


Boscawen, Rt. Hon. Sir A, Griffith-
Holmes, J. Stanley
Sassoon, Sir Philip Albert Gustave D.


Bowyer, Captain G. W. E.
Hope, Sir H. (Stirling & Cl'ckm'nn,W.)
Scott, A. M. (Glasgow, Bridgeton)


Bridgeman, Rt. Hon. William Clive
Hope, Lt.-Col. Sir J. A. (Midlothian)
Scott, Sir Leslie (Liverp'l, Exchange)


Briggs, Harold
Hopkins, John W. W.
Seddon, J. A.


Brown, Brig.-Gen. Clifton (Newbury)
Hopkinson, A. (Lancaster, Mossley)
Seely, Major-General Rt. Hon. John


Buckley, Lieut.-Colonel A.
Horne, Sir R. S. (Glasgow, Hillhead)
Shaw, William T. (Forfar)


Burgoyne, Lt.-Col. Sir Alan Hughes
Inskip, Thomas Walker H.
Shortt, Rt. Hon. E. (N'castle-on-T.)


Campion, Lieut.-Colonel W. R.
James, Lieut.-Colonel Hon. Cuthbert
Smith, Sir Allan M. (Croydon, South)


Carr, W. Theodore
Jones, Henry Haydn (Merioneth)
Smith, Sir Harold (Warrington)


Casey, T. W.
Kellaway, Rt. Hon. Fredk. George
Sprot, Colonel Sir Alexander


Chamberlain, Rt. Hn. J. A. (Birm. W.)
Kidd, James
Stanley, Major Hon. G. (Preston)


Chamberlain, N. (Birm., Ladywood)
King, Captain Henry Douglas
Steel, Major S. Strang


Churchman, Sir Arthur
Lane-Fox, G. R.
Stephenson, Lieut.-Colonel H. K.


Cockerill, Brigadier-General G. K.
Law, Alfred J. (Rochdale)
Sugden, W. H.


Colfox, Major Wm. Phillips
Leigh, Sir John (Clapham)
Sutherland, Sir William


Cope, Major William
Lindsay, William Arthur
Sykes, Sir Charles (Huddersfield)


Curzon, Captain Viscount
Locker-Lampson G. (Wood Green)
Thomson, F. C. (Aberdeen, South)


Davidson, J. C. C. (Hemel Hempstead)
Locker-Lampson, Com. O. (W'tingd'n)
Thomson, Sir W. Mitchell (Maryhill)


Davidson, Major-General Sir J. H.
Mackinder, Sir H. J. (Camlachle)
Tryon, Major George Clement


Davies, Alfred Thomas (Lincoln)
Macpherson, Rt. Hon. James I.
Vickers, Douglas


Dewhurst, Lieut.-Commander Harry
Macquisten, F. A.
Wallace, J.


Doyle, N. Grattan
Mallalieu, Frederick William
Ward, William Dudley (Southampton)


Edgar, Clifford B.
Manville, Edward
Waring, Major Walter


Edge, Captain Sir William
Montagu, Rt. Hon. E. S.
Watson, Captain John Bertrand


Edwards, Major J. (Aberavon)
Morden, Col. W. Grant
Wheler, Col. Granville C. H.


Edwards, Hugh (Glam., Neath)
Moreing, Captain Algernon H.
White, Col. G. D. (Southport


Eyres-Monsell, Com. Bolton M.
Morrison-Bell, Major A. C.
Williams, Col. P. (Middlesbrough, E.)


Evans, Ernest
Murchison, C. K.
Wills, Lt.-Col. Sir Gilbert Alan H.


Fildes, Henry
Murray, Hon. A. C. (Aberdeen)
Windsor, Viscount


FitzRoy, Captain Hon. Edward A.
Murray, Rt. Hon. C. D. (Edinburgh)
Winterton, Earl


Ford, Patrick Johnston
Murray, John (Leeds, West)
Wise, Frederick


Forrest, Walter
Neal, Arthur
Wood, Sir J. (Stalybridge & Hyde)


Foxcrott, Captain Charles Talbot
Newman, Sir R. H. S. D. L. (Exeter)
Young, Sir Frederick W. (Swindon)


Fraser, Major Sir Keith
Newton. Sir D. G. C. (Cambridge)



Frece, Sir Walter de
Nicholson, Brig.-Gen. J. (Westminster)
TELLERS FOR THE NOES.—


Fremantle, Lieut.-Colonel Francis E.
Norton-Griffiths, Lieut.-Col. Sir John
Colonel Leslie Wilson and Mr.


Gee, Captain Robert
Ormsby-Gore, Hon. William
McCurdy.


Gibbs, Colonel George Abraham
Parker, James

CLAUSE 5.—(Delivery of particulars for purposes of Super-tax.)

(1) The Special Commissioners may, whether an assessment to Super-tax has been made or not, require any individual who has been required to make a return of his total income for the purposes of Super-tax to furnish to them within such time as they may prescribe, not being less than twenty-one days, such particulars as to the several sources of his income and the amount arising from each source, and as to the nature and the amount of any deductions claimed to be allowed therefrom, as they consider necessary.
(2) If any person without reasonable excuse fails to furnish within the time prescribes any particulars required under this Section, he shall be liable to a penalty not exceeding fifty pounds, and after judgment has been given for that penalty to a further penalty of the like amount for every day during which the failure continues.

Amendment proposed: In Sub-section (1), leave out the words "twenty-one" ["twenty-one days"], and insert instead thereof the word "twenty-eight."—[Mr. A. M. Samuel.]

Sir L. SCOTT: I accept the Amendment.

Amendment agreed to.

Mr. A. M. SAMUEL: I beg to move in Sub-section (1) to leave out the words "they consider necessary" ["as they consider necessary"], and to insert instead thereof the words "required by the Income Tax Act, 1918."
This is a protection given by Statute to the tax-payer, and should be continued. It should not be left to the discretion of Special Commissioners. Legislation already exists, and we should have the safeguards to which we are entitled.

Sir L. SCOTT: Will the Committee forgive me if I remind them what was the arrangement made across the Floor of the House yesterday, that the Committee stage should be concluded at the end of the fourth day and we are well towards the end of the second day, and there is a good deal to be done yet. There was also the arrangement yesterday that we should not on any night sit unduly late. I suggest that we are getting rather near to that condition.

Mr. N. MACLEAN: Your own people have kept you going.

Sir L. SCOTT: I would appeal to the hon. Member.

Colonel WEDGWOOD: Appeal to your own people!

Sir L. SCOTT: My appeal is to everyone to get through the remainder of Part II as rapidly as we can. This Amendment is one that would go to the root of the Clause and the Clause is a vital one. Under the law as it stands, the only obligation on a taxpayer is to make a return of his total income from all sources. It is true that the Special Commissioners who assess Super-tax do from time to time ask for particulars, but they have no right to demand particulars. Let me give the Committee a few instances showing the vital need for obtaining such particulars. We find in numerous cases that the returns are so inaccurate, the particulars given so insufficient, that as a matter of fact the present system affords cover for carelessness and error which are hardly distinguishable in result from fraud. In one case where it was possible to obtain details after the death of the taxpayer, the correct figure should have been over £22,000, the dividends in one private company having been entirely omitted. The figure returned in the Super-tax return was £2,500. In another case, where dividends of £14,000 and £15,000 had been returned, it was found on investigation that the correct figures should have been £37,000 and £38,000. I have a number of other instances. One nil return should have been £8,900. Another nil return should have been £6,300. What is wanted is to give to the Special Commissioners power in these classes of cases of asking for particulars of the different sorts of income, and particulars of different deductions. If that is done this kind of quite unintentional evadence may be avoided. I ask the hon. Member not to press his Amendment.

Mr. LOCKER-LAMPSON: The hon. Gentleman has suggested that it is getting late. May I remind him that the Government put down a Clause which proves to be utterly unworkable, and it takes the Committee two hours to persuade the Chancellor of the Exchequer to withdraw it. It is not our fault that for the last two hours we have been talking about an unworkable Clause. I suggest, therefore, that it is the business of the Government not to keep us up any longer, having wasted two hours of Parliamentary time.

Sir L. SCOTT: It was only one hour.

2.0 A.M.

Mr. LOCKER-LAMPSON: With regard to the Amendment, I should like to know whether the Special Commissioners have at length been instructed to find out from the Inland Revenue what is the income returned to the Inland Revenue. My information is that ever since the Super-tax was introduced the Super-tax Commissioners have acted completely on their own, have made a rough-and-ready sort of list of people liable, and have never taken the trouble to co-operate with the Inland Revenue people to find out; who is liable. I hope that in future the Chancellor of the Exchequer will see to it that there is co-operation between the Super-tax Commissioners and the Inland Revenue authorities. The want of cooperation up to now has led to the loss of a great deal of revenue.

Mr. A. M. SAMUEL: I am entirely at one with the Government in thinking that the Commissioners, or the authorities, should have every power to get at the truth, but I am totally against a wider roving type of power such as is indicated by the words "such as they consider necessary." Where is that going to lead to? They may ask all sorts of questions of trade secrecy. There is no restriction as to the questions that the Special Commissioners may ask, questions which they may consider reasonable we may consider unreasonable and harassing. There are limits to the length to which the Commissioners should go, and they should be defined by the House of Commons.

Sir L. SCOTT: I am afraid my hon. Friend has not given due weight to the words of the Clause. The Commissioners are strictly limited in regard to the particulars they are entitled to ask for—particulars as to the several sources of income, the amount from each source, and the nature and the amount of the deductions.

Mr. SAMUEL: Does not that power already exist?

Mr. REMER: I beg to move, "That the Chairman do report Progress, and ask leave to sit again."
It is an extraordinary thing that we should be discussing so many intricate matters of finance at this late hour of the night. They are questions of the most important character, and I really
think that we ought to report Progress. I have listened to debates of the utmost importance to the commercial interests of this country, and I think it is a scandalous thing that at 2 o'clock in the morning we should start to discuss another thing of vital interest to commercial men.

The CHAIRMAN: I cannot accept the Motion.

Mr. SAMUEL: I beg to ask leave to withdraw my Amendment — [HON. MEMBERS: "No!"]

Amendment negatived.

Clause, as amended, ordered to stand part of the Bill.

CLAUSE 16.—(Amendments as to Schedule B.)

(1) The definition of the expression "assessable value" in Schedule B of the Income Tax Act, 1918, shall have effect as though for the words "an amount equal to twice the annual value" there were substituted the words "an amount equal to the annual value," and as though for the words "an amount equal to the annual value" there were substituted the words "an amount equal to one-third of the annual value."
(2) In paragraph (a) of Rule 7 of the Rules applicable to Schedule B there shall be substituted for the words "a year" the words "ten years."

Mr. LOCKER-LAMPSON: I beg to move to leave out Sub-section (1).
It is hardly worth while making Amendments at this late hour of the morning. This is a most important Clause—one of the most important Clauses of the whole Bill. It raises the whole question of whether the farming community ought to be given preference over every other kind of business in the country. I am not speaking in any spirit of hostility towards the farming community, not in the least, but I have never heard any reason why the farming community should be given this preference. Take the case of a farmer who is assessed at £1,000 a year, a purely conventional assessment. And then take the case of a business man whose profit is assessed at £1,000. Supposing that in another year they make only £500 apiece. The farmer has his assessment. reduced by £500, hut the business man is still assessed at £1,000. If in another year they make no profit at all, the farmer's assessment is wiped out altogether, but the business man still
has to pay on £1,000. That seems to me a most unfair state of things. I cannot understand why hon. Members do not insist either that the farmer shall be brought under Schedule D or that the business man shall be given the same preference as the farmer. I suppose it arose originally because the farming interest is very highly organised. They went to the Chancellor of the Exchequer and put their case before him, and he gave in to them. The small business man is not nearly so highly organised. When various individuals representing him went to the Chancellor of the Exchequer with an equally good case, nothing was done. At this hour of the night I am not going to tire the Committee with a long speech on the subject, but I do protest against it, and I am going to divide. I have never heard any single reason given for this preference, and I had very much looked forward to hearing the learned Solicitor-General explain why it is that the small business man should be penalised and the farming industry get its preference, and unless he satisfies me I shall certainly go into the Lobby.

Sir L. SCOTT: I fear that I am not likely to satisfy the hon. Member, having regard to the remoteness of the statement he has made from the actual facts of the ease. In past years farmers in this country were assessed exclusively under Schedule B in respect of the occupation of their land. It is quite true that at a later date they were given an option of going under Schedule D, but, as every Member of the Committee knows, in order effectively to claim assessment under Schedule D you must keep accounts, and it is a matter of regret but is none the less a matter of fact that there are large numbers of farmers who do not keep such accounts as may be practicable for them to be assessed on.

Mr. LOCKER-LAMPSON: Neither do small business men.

Sir L. SCOTT: Some Member asks why should not farmers keep accounts. As far as I have any knowledge of agriculture, it would be an infinitely better thing for the agriculture of the country if every farmer did keep accounts, particularly coatings accounts; but the farmers do not keep them and, after all, taxation must be adapted to the existing state of affairs. Now it is on that footing that farmers
were not put as a matter of obligation under Schedule D, because it was recognised that in regard to a large number of farmers it would not be practicable for some years to come—possibly for a generation in some cases. There is also another reason. The fanners of this country have borne, it is said by them—

The CHAIRMAN: I rather think that I should have stopped the hon. Member in the course of his argument. The question is not that a farmer should be assessed under Schedule D or B. The question is whether they should be taxed twice on the annual value or on the annual value itself. I do not think I can allow a discussion on Schedule A or B.

Colonel WEDGWOOD: On a point of Order. At present a farmer has the alternative of being taxed under Schedule D or B. They were less likely to select Schedule D under the new scheme than they were under the old scheme.

The CHAIRMAN: That might be, but it is not in order upon the narrow issue. The question is whether they should be assessed on twice their annual value or on their annual value.

Mr. LOCKER-LAMPSON: My point was that they had a preference up to now. In answer to the Solicitor-General, if farmers do not keep books, a great many small traders do not keep books.

Sir L. SCOTT: I gratefully and gladly bow to your ruling, although my hon. Friend apparently wishes to keep the Debate on a larger field. Let us take it on that position, that farmers were taxed under Schedule B, and stop at that. During the War, when the exigency of searching for every possible source of income was upon us, and when farmers were making very large profits—in the middle of the War—this assessment under Schedule B was doubled. The position at the present day is that, so far as from farmers being very successful, they are having an extremely hard time and it would be taxing them far higher than the equivalent of Schedule D if they were continued at twice the annual value under Schedule B. I do not believe, taking the average of farmers of this country, that they have reached a level of annual value under Schedule B during the last year, and that is the basis of this Clause. It is to bring the taxation of
farmers down to something approximately comparable to other members of the community. The suggestion that by this provision they are being put upon a privileged basis has not a shadow of foundation and I ask the Committee to resist the Amendment.

Colonel WEDGWOOD: I would like to point out to the Solicitor-General why farmers should be put in a privileged position. The smaller the tax the farmer has to pay, the larger rent he will be able to pay. I congratulate the hon. Member for Wood Green (Mr. G. LockerLampson) on moving this Amendment.

It is unusual to find a member of the Conservative party running right in the teeth of the interests of the landed gentry of this country. I shall be very pleased to find him going into the Lobby, and I am sure he will have the support of all those who do not belong to the landed interests.

Question put, "That the words proposed to be left out, to the word 'as' "shall have effect as though "], stand part of the Clause."

The Committee divided: Ayes, 140; Noes, 41.

Division No. 162.]
NOES
[2.15 a.m.


Acland, Rt. Hon. Francis D.
Fremantle, Lieut.-Colonel Francis E.
Pease, Rt. Hon. Herbert Pike


Agg-Gardner, Sir James Tynte
Gee, Captain Robert
Pennefather, De Fonblanque


Amery, Rt. Hon. Leopold C. M. S.
Gibbs, Colonel George Abraham
Percy, Lord Eustace (Hastings)


Armstrong, Henry Bruce
Gilmour, Lieut.-Colonel Sir John
Perkins, Walter Frank


Atkey, A. R.
Goff, Sir R. Park
Pollock, Rt. Hon, Sir Ernest Murray


Baird, Sir John Lawrence
Gould, James C.
Rae, Sir Henry N.


Baldwin, Rt. Hon. Stanley
Green, Albert (Derby)
Raw, Lieutenant-Colonel Dr. N.


Balfour, George (Hampstead)
Greene, Lt.-Col. Sir W. (Hackn'y, N.)
Ramer, J. R.


Barlow, Sir Montague
Greenwood, William (Stockport)
Richardson, Sir Alex. (Gravesend)


Barnett, Major Richard W.
Grenfell, Edward Charles
Richardson, Lt.-Col. Sir P. (Chertsey)


Barnston, Major Harry
Guest, Capt. RI. Hon. Frederick E.
Robinson, S. (Brecon and Radnor)


Barrand, A. R.
Hacking, Captain Douglas H.
Samuel, A. M. (Surrey, Farnham)


Bell, Lieut.-Col. W. C. H. (Devizes)
Hall, Lieut.-Col. Sir F. (Dulwich)
Samuel, Samuel (W'dsworth, Putney)


Betterton, Henry B.
Hamilton, Sir George C.
Sanders, Colonel Sir Robert Arthur


Bigland, Alfred
Hannon, Patrick Joseph Henry
Sassoon, Sir Philip Albert Gustave D


Birchall, J. Dearman
Harmsworth, C. B. (Bedford, Luton)
Scott, A. M. (Glasgow, Bridgeton)


Berwick, Major G. O.
Henderson, Lt.-Col, V. L. (Tradeston)
Scott, Sir Leslie (Liverp'l, Exchange)


Boscawen, Rt. Hon. Sir A. Griffith-
Hennessy, Major J. R. G.
Seddon, J. A.


Bowyer, Captain G. W. E.
Herbert, Dennis (Hertford, Walford)
Seely, Major-General Rt. Hon. John


Bridgeman, Rt. Hon. William Clive
Hinds, John
Shortt, Rt. Hon. E. (N'castle-con-T.)


Briggs, Harold
Hope, Sir H. (Stirling & Cl'ckm'nn'n.W.)
Smith, Sir Allan M. (Croydon, South)


Broad, Thomas Tucker
Hope, Lt.-Col. Sir J. A. (Midlothian)
Sprot, Colonel Sir Alexander


Brown, Brig.-Gen. Clifton (Newbury)
Hopkins, John W. W.
Stanley, Major Hon. G. (Preston)


Buckley, Lieut.-Colonel A.
Horne, Sir R. S. (Glasgow, Hillhead)
Steel, Major S. Strang


Burgoyne, Lt.-Col. Sir Alan Hughes
Jones, Henry Haydn, (Merloneth)
Stephenson, Lieut.-Colonel H. K.


Campion, Lieut.-Colonel W. R.
Kellaway, Rt. Hon. Fredk. George
Sturrock, J. Leng


Carr, W. Theodore
Kidd, James
Sugden, W. H.


Casey, T. W.
King, Captain Henry Douglas
Sutherland, Sir William


Chamberlain, RI. Hn. J. A.(Birm.,W.)
Lane-Fox, G. R.
Sykes, Sir Charles (Huddersfield)


Chamberlain, N. (Birm., Ladywood)
Locker-Lampson, Com. O. (H'tingd'n)
Thomson, F. C. (Aberdeen, South)


Cockerill, Brigadier-General G. K.
Macpherson, Rt. Hon. James I.
Thomson, sir W. (Mitchill)-(Maryhill)


Colfax, Major Wm. Phillips
Macquisten, F. A.
Tryon, Major George Clement


Cope, Major William
Mallalieu, Frederick William
Wallace, J.


Davidson, J. C. C. (Hemel Hempstead)
Manville, Edward
Ward, William Dudley (Southampton)


Davies, Alfred Thomas (Lincoln)
Morden, Col. W. Grant
Waring, Major Walter


Dewhurst, Lieut.-Commander Harry
Moreing, Captain Algernon H.
Watson, Captain John Bertrand


Doyle, N. Grattan
Morrison-Boll, Major A. C.
Wheler, Col. Granville C. H.


Edgar, Clifford B.
Murchison, C. K.
White, Col. G. D. (Southport)


Edwards, Major J. (Aberavon)
Murray, Hon. A. C. (Aberdeen)
Wilts, Lt.-Col. Sir Gilbert Alan H.


Edwards, Hugh (Glam., Neath)
Murray, Rt. Hon. C. D. (Edinburgh)
Windsor, Viscount


Eyres-Monsell, Com. Bolton M.
Murray, John (Leeds, West)
Winterton, Earl


Evans, Ernest
Neal, Arthur
Wise, Frederick


Fildes, Henry
Newman, Sir R. H. S. D. L. (Exeter)
Wood, Sir J. (Stalybridge & Hyde)


FitzRoy, Captain Hon. Edward A.
Nicholson, Brig.-Gen. J. (Westminster)
Young, Sir Frederick W. (Swindon)


Ford, Patrick Johnston
Norris, Colonel Sir Henry G.



Forrest, Walter
Norton-Griffiths, Lieut.-Col. Sir John
TELLERS FOR THE AYES.—


Fraser, Major Sir Keith
Ormsby-Gore, Hon. William
Colonel Leslie Wilson and Mr.


Frece, Sir Walter de
Parker, James
McCurdy.


NOES


Adamson, Rt. Hon. William
Edwards, C. (Monmouth, Bedwelity)
Holmes, J. Stanley


Ammon, Charles George
Graham, D. M. (Lanark, Hamilton)
Hopkinson, A. (Lancaster, Mossley)


Armitage, Robert
Grundy, T. W.
John, William (Rhondda, West)


Banton, George
Hall, F. (York, W.R., Normanton)
Jones, J. J. (West Ham, Slivertown)


Barnes, Major H. (Newcastle, E.)
Halls, Walter
Jones, Morgan (Caerphilly)


Bell, James (Lancaster, Ormskirk)
Hartshorn, Vernon
Lawson, John James


Brown, James (Ayr and Bute)
Hayday, Arthur
Lindsay, William Arthur


Davies, Evan (Ebbw Vale)
Henderson, Rt. Hon. A. (Widnes)
Locker-Lampson, G. (Wood Green)


Davies, Rhys John (Westhoughton)
Hirst, G. H.
Lunn, William


Maclean, Neil (Glasgow, Govan)
Sitch, Charles H.
Wedgwood, Colonel Josiah C.


Mills, John Edmund
Spencer, George A.
Williams, Col. P. (Middlesbrough, E.)


Parkinson, John Allen (Wigan)
Sutton, John Edward



Raffan, Peter Wilson
Thorne, W. (West Ham, Plaistow)
TELLERS FOR THE NOES.—


Roberts, Frederick O. (W. Bromwich)
Waterson, A. E.
Mr. T. Griffiths and Mr. Walter


Shaw, Thomas (Preston)
Watts-Morgan, Lieut.-Col. D.
Smith.

Colonel WEDGWOOD: I beg to move, in Sub-section (1), to leave out the words
and as though for the words 'an amount equal to the annual value' there were substituted the words 'an amount equal to one-third of the annual value.'
The Amendment is to cut out special exemption from amenity land. In the Bill as it stands, in Clause 16, the land which is not being used for agriculture, but used and described by the Chancellor of the Exchequer in his Budget speech as "amenity land," is receiving a special low assessment for Income Tax purposes. I should be very interested to see what arguments are brought forward in favour of giving specially advantageous treatment to the owners who keep their land for amenity purposes instead of productive purposes. The natural tendency would be to give a bonus to landowners who used their land productively, but apparently the Government think the owners ought to be selected from all the rest for special benefits, while those who use their land unproductively are to be given a preference of one-third of the rental value while the others have to pay on the whole of the rental value. That certainly wants some explanation in times of unemployment like the present. Here you are deliberately keeping labour off the land. You are giving a special advantage not only to farmers but. to people who might farm their land but do not. I know there is no hope of persuading the Government to give this up, for they have not only the blessings but the votes of the Lond Union, and the Minister of Agriculture has always been fighting for this advantage for amenity land. Perhaps we shall be able to find out from the Solicitor-General or the Minister of Agriculture how much land is affected by this exemption and how much the Government expect to lose by way of Income Tax by reason of it, even if we cannot get any reasonable account of the motives actuating the Government in making this exemption.

Sir L. SCOTT: The object of this part of the Clause is very simple. It is to put back to the position before 1915 lands from which no profit is obtained.
This is an Income Tax provision. The gist of the matter is that during the War the tax was trebled owing to war exigency, and it has been put back now simply to the old level, which in itself is a tax upon an income that is purely notional, and does not exist in fact.

Major BARNES: I should like to express the wish that in future when the Finance Bill is published a memorandum should be prepared to enable us to understand it. If it went only as far as this, that where references are made to other Acts with the quotations that are necessary, they should be printed. On the Amendment itself, I feel rather reluctant to support my hon. and gallant Friend, because this Clause itself embodies a state of things that we would all like to see generally. In this Clause the Government goes back to pre-War taxation. That is what we have been told by the Solicitor-General. In the deep sea of taxation bottom is touched at least in this Clause.

Sir L. SCOTT: The tax was one-third on all land, both agricultural and amenity land.

Major BARNES: The Solicitor-General commended this Clause to us on the ground that we were getting back to something that existed in pre-War times. We on this side of the Committee have been trying to get back to the pre-War basis of all sorts of taxation. We have been trying to get a reduction on beer, and last night we had a very impassioned speech from the Member for the Western Isles (Dr. Murray), who tried to get the additional duty off dried fruits. We were told that could not be done because it would cost £180,000.
My hon. and gallant Friend asked what was the cost of this. The Chancellor of the Exchequer stated in his Budget speech that in the present year this allowance on amenity lands meant £180,000, and in a full year £300,000. The Solicitor-General, in dealing with the question of bringing down the basis on which farms were taxed, said that it was put up during the War because during the War it was necessary to look for every penny. The implication, I suppose, is that that is not the case now. This is the first time we have
heard that statement from the Treasury Bench. Yesterday, when the Chancellor of the Exchequer was in charge, his theme was that we were just as much at our wits' end for money as ever we were. I do not complain of getting back to the pre-War basis, but who are the class of people who are getting back to the pre-War basis? Not the people who live in small houses; not the middle-class people who have got moderate gardens and grounds. The person with a villa and an acre of land will get no benefit. The Clause gives a very faint idea of the kind of people. The wording of the Clause is very dull and prosaic. I happened to be looking yesterday in a newspaper and I found the sort of property that is going to get the benefits of this Clause described in very much more glowing language than appears in the Bill, and I will read to the Committee a very short extract. It is headed:
The Treasures of a Duke—500-Year Old House—Most Beautiful Trees in England"—
and it goes on to describe the kind of amenity lands which are to receive this relief. It describes a place not far from London as one of the glories of the Metropolis. The description goes on:
But for all that, it remains unaltered and unspoiled, one of the finest country houses in England. You can stand by the lake and watch the heron fishing in a silence as of the New Forest; you can wander among its stately trees and note the rabbits frisking in as wide a solitude as if you were in some remote corner of Salisbury Plain. Seventy acres of 'pleasure grounds' and thrice that amount of park land in which none but the privileged may walk make a great space of privacy in which beauty and tradition remain as uncontaminated by the crowd's ignoble strife as if they were in Wiltshire.
That is in the "Evening News." It goes on with a. description of this amenity land to which the Solicitor-General is so tender. It says:
The lakes and pools are rich with water-lilies, white, pale yellow, pink and red; and in the domed conservatory are rare curious plants from all parts of the world.
These are the amenity lands that are to get this relief, and the article finishes by telling us that this beautiful place is let to a Paris art dealer. The Solicitor-General says that this relief is being given to land which yields no income. I fancy that when this property was let to the Paris art dealer the 70 acres of gardens, the pleasure grounds, and the park were taken into account and formed part of the rent, and that when this place is assessed under Schedule A, the assess-
ment will be apportioned between the house and the park and pleasure grounds, and yet under this Clause that portion of the rent which is received for the park and pleasure grounds will only be assessed under Schedule A at one-third of its value. That is the effect of this Clause. We are grateful for small mercies when we get back to a pre-War basis of some sort or other, and if the Chancellor of the Exchequer and the Solicitor-General feel that a better way is to commence with the dukes, we can only hope that they will make rapid progress, and at last get down to our level.

Mr. ACLAND: My hon. and gallant Friend has drawn a beautiful picture on one side. May I in a few words draw a real picture on the other side. This part of the Clause with which we are dealing refers, of course, to forestry lands, and I will deal with it in a way that it affects actual people. I have a lot of land which I wish to replant. That is costing me about £2,000 a year. If I were to put that money into War Loan at compound interest I would be making a very much better thing of it for myself and my family. Planting, however, gives a considerable amount of employment. If I let that land as rough pasture at 2s. an acre, that will be really using the land. Regarding land which I have which is really amenity land—as in so many other cases of people who really have beautiful gardens surrounding houses which they cannot afford to live in, which is my case—the garden is open to the public always, and is enjoyed by a great number of people. I get nothing out of it, and since it is open for public use, I think that, on the whole, I am making a reasonable contribution to the Chancellor of the Exchequer.

Mr. N. MACLEAN: I hope the Chancellor of the Exchequer will see his way to withdraw this Clause, as he did a previous one. Although I differ from him in the point of view with which he regarded the other Clause, he probably considers it a good example and I hope he will not falter in well-doing. The Chancellor of the Exchequer is hard put to it for money. At least, he has told us all through the Budget Speech. Yet in this Clause—which is inserted in quite a tricky little way; I do not mean anything disparaging to the Chancellor of the Exchequer,
though he makes one who only takes a cursory glance at the Budget proposals imagine there is nothing in it until one goes back to the reference—he is going to give to the farmers something like £300,000 in a full year. But later, with regard to another concession he is going to make, he is giving to the farmers something over two million pounds.

The CHAIRMAN: That point was dealt with on the last Amendment.

Mr. MACLEAN: I quite understand that. I am giving this only as an illustration. This concession he can actually afford, in spite of the fact that he is hard put to it for money. He is evidently able to afford to give concessions to the landowning and agricultural classes. I want to take the memory of the Committee back to yesterday and I am sure the Solicitor-General will be grateful to me for refreshing his memory. In a Debate which took place we were told that the Government could not afford to give the concession which we on these Benches were seeking to have by moving an Amendment. The Solicitor-General said that total loss on tea, in addition to the reduction, would be £7,000,000. The loss on the proposal we were making would be the difference between £4,800,000 and £7,500,000—that is £2,700,000. The question, he said, was can we afford it? Then he went on to tell us, in the most explicit language, that the country would be ruined if he gave this concession to the Labour Members. I am not quoting his exact words, but the context of his speech was to the effect that the country would he ruined or practically ruined—financially in danger, shall I put it—if he yielded the concession we were seeking. You are refusing to a very well-meaning part of the community—a part which deserved the concession—because you say the country cannot afford £2,500,000, yet you are giving to the landlord and agricultural classes ever two millions. To the one section you can afford it.

The CHAIRMAN: This is a very limited Amendment. It does not refer to agricultural land in the strict sense at all. The hon. Member cannot discuss this question as if it were a concession to agriculture.

Mr. MACLEAN: I am using it as illustrating the way in which the
Government is giving concessions where concessions were not required, and refusing concessions where they are required. I want to draw the attention of the Chancellor of the Exchequer to what was said when this particular tax was imposed. The then Chancellor, who afterwards became Leader of the House—he is not here because of the state of his health, which we all regret—the then Chancellor, the right hon. Member for Central Glasgow (Mr. Bonar Law) said if the land was not being properly used then it ought to pay a higher tax. I have his speech here. That was during the War when we wanted all the land that was available put into use, and he put on the heavy tax, and he desired to put a heavier tax upon amenity land than hitherto had been paid in order to compel those who sought to keep amenity land round their houses put it into use that would be beneficial to the country. We have not arrived at a period when we are free from the burdens that were laid upon us by the War. We are told that all classes of taxes have still to be kept on because money is required in order to help meet the burden of a great War. You are, in this Finance Bill, seeking to relieve a section of the community from continuing to bear its share of the burden while, at the same time, you are keeping on some taxes that were imposed during the War for the same purpose. That is decidedly unfair and warrants the criticism we have made on this Finance Bill as being a rich man's Budget.
The whole essence of it from beginning to end, and particularly in this case, is a concession to the landed interests of this country. All that we can say from these Benches seems to have little or no effect upon the Chancellor of the Exchequer. Were we proprietors of amenity land we might have some effect upon him; we might get greater concessions. Unfortunately, we plead for other sections of the community and consequently our pleas have little or no effect. I hope that when this question goes before the people of the country Members of this House will realise that the electors, those who suffer from the taxation thus imposed upon them, will have some questions to ask. Some of those who in the old days were particularly keen in advocating up and down the country that land that was held merely for pleasure by individuals
should be taxed most heavily, when they go before their constituents will find their old speeches used against them and they will be asked to show how their conduct either in this Debate or in the Division coincides with their previous advocacy of taxation of unused and pleasure land. I am sure that the Prime Minister does not view this particular Clause with any degree of pleasure. It flies in the face of all his previous advocacy and the very fact that we have given this concession to the landed aristocracy of this country, to those who possess the amenity land in this country, is an indication of the surrender of the old Coalition Liberals and land taxes to the Conservative section of the Coalition. I feel certain that the Minister of Pensions does not feel any too happy in his position to-night. He is by no means looking happy. Whether it is the effect of this Clause that is under discussion or the hour of the morning I do not know.

The CHAIRMAN: Everyone knows that facial diagnosis is not in order.

Mr. MACLEAN: Here is a Clause that flies in the face of all the previous advocacy of the Minister of Pensions, the Member for the Bridgeton Division of Glasgow (Mr. M. Scott) and the Chancellor of the Duchy of Lancaster. Let one consider the striking paragraphs that one used to read in the land book edited by the Chancellor of the Duchy who will, when the division bell rings, walk into the lobby and vote against the very things in the writing of which he rose into political power. I am certain that the land song will be sung to a new tune when the Chancellor of the Duchy and his friends go into the National Liberal Club and have a good night together. I hope that the Chancellor of the Exchequer will accept the suggestion that I made in the opening sentences of my speech and that he will yield to the pressure from these Benches and follow the example already taken by him and show that if he is able to yield to the pressure from other parts of the Committee he is also susceptible to pressure from the Opposition Benches.

Mr. RAFFAN: I make no apology for intervening to take this Debate further, notwithstanding the early hour of the morning. It is not in the least. my fault that we are compelled to discuss what, in my view, is one of the most important
departures from the principles in previous Budgets. This is the first occasion on which I have intervened in the whole Debate, and I cannot be blamed for any obstruction which has taken place. I can understand that it is extremely convenient for the Government that the Debate should take place at this hour, in view of the pledges given by the Prime Minister and others. They are not anxious that this proposal should be clearly examined and discussion upon it reported, and opportunity should be given to the House of Commons to examine it. Nobody can have listened to these Debates without realising that there probably does not exist a more practised or able debater than the Solicitor-General. When he has had a good case he has handled it with great ability. In this matter, however, he has not only treated and presented the case in a most perfunctory fashion, but in a manner un-usually disingenuous. He indicated in his speech that what was being done was that we were now reverting to pre-War practice in this matter, and he asked the Committee to be content to adopt this proposal because of that. It was only the speech of one of my hon. Friends that drew from him the admission that both classes of land were then assessed at one-third of the rent, and now in the proposal before the Committee the occupier of cultivable land pays Income Tax on a full year's rental, whereas when you deal with amenity land you only pay one-third of the rental. So there is this vital difference between the pre-War position and the present position. Under pre-War conditions the person who held agricultural land and the person who held amenity land were exactly in the same position. [Interruption.]

The CHAIRMAN: I would ask hon. Members not to interrupt.

3.0 A.M.

Mr. RAFFAN: Having waited since the commencement of the Budget discussions to make one speech, I am entitled to make it. I think that I am entitled to point out that this is not the only matter in which the speech of the hon. and learned Gentleman was altogether disingenuous. How can it be said that in such a case as the one quoted by the Member for Newcastle (Major Barnes) there is no income from this amenity land? Even in the
case of the person who holds land for his own use and pleasure, in what way is he different from any hon. Gentleman who is the owner of his house in the Metropolis? It shows the weakness of the hon. and learned Gentleman's case when he comes forward with statements that are so disingenuous. The broad fact is as my hon. Friend the Member for Govan (Mr. N. Maclean) has said, the Chancellor of the Exchequer has been unable so far to find any source from which he could make any concession to the poor and the humble throughout the whole of this Budget. I do not think that so far he has responded to any appeal to lighten the burden upon the very poorest. The great landlord interest does not appeal to him in vain. He is able to find for them an annual remission of £300,000. The Minister of Agriculture, whose task it was to settle upon the land the returned soldiers, has practically abandoned his task.

The MINISTER of AGRICULTURE (Sir Arthur Boscawen): No.

Mr. RAFFAN: Every small holding colony scheme has now reached its full development, and the right hon. Gentleman cannot find another penny for such schemes, but £300,000 can be remitted to the landlord interest. I am not animated by any antipathy to landlords as such, and if the £300,000 was going, through the medium of the landlord class, to be devoted to the development of agricultural land in this country I would say that it was a proposal worthy of consideration. But so far from that being the case, you are not merely differentiating between one class and another, but you are discouraging the best use of the land of the country. If you are dealing with the smallholder, whose improvement value is high compared with the land value in his holding, at any rate if he does not pay Income Tax local taxation comes down on him with crushing force. Where the land is being used purely for sport, the holder pays Income Tax upon one-third of the rental value, while, if it is used to the best advantage, it pays taxation at three times that rate. It is quite impossible for prosperity to return to agriculture in this country so long as that policy is pursued. I believe it is perfectly idle to appeal to the members of the
present Government. There is one member of the Government who, I believe, would still be willing to adopt a true policy and that member is the Prime Minister, but he is the prisoner of the Tory party, while the Chancellor of the Exchequer is their obedient slave. In the circumstances all that those of us who are opposed to this policy can do is to point out, as far as we can, to the House of Commons and to the people of the country, what the policy means. I believe that when an opportunity is given the people of this country will see that a Government is returned to power which will reverse the policy which is being pursued.

Mr. MILLS: I feel that this proposal comes with a, very bad grace from a Government which, for the second year in succession has remitted taxation borne by those who are best able to pay for it. Last year the only remission of taxation was in the matter of the most expensive cigars and sparkling wines. This year the remission in taxation is to be in the case of those who should, at a time like this, pay the full proportion of taxes on land kept out of use. I should have thought that the experience of five years of war would have brought home to some of the hon. Gentlemen opposite the consciousness of where we stand. When we are facing a position in which millions of people have become accustomed to daily idleness for years, it would be far better to do something other than the Government are doing. The hon. Member for East Newcastle (Major Barnes) put the case of a distinguished Member of the other House who has written many cheap tracts on the perils of Bolshevism, who will have taxation remitted, and will be paying less in taxes on 70 acres of land within the boundaries of Chiswick than a street full of shopkeepers on the other side of the road. I feel that in these days, when every kind of attack is being made upon Constitutional government, you are giving to the opponents of Constitutional government one of the most formidable weapons they could possibly use when they can point to this fact—that in the year 1922, when every kind of relief is being examined most minutely, when even the question of local authorities heading into bankruptcy makes no appeal upon your Chancellor of the Exchequer.

Mr. ERNEST EVANS: The hon. Member for Leigh (Mr. Raffan) used the word "disingenuous" four times in the course of his speech, which was irrelevant to this particular Amendment and duty. I should like to ask him, when be used that word what he means and for whom he was speaking?

Mr. RAFFAN: Speaking for the democracy of this country.

Mr. EVANS: I am glad to hear that he speaks on behalf of the democracy. I want to know who else shares the representation of democracy with him. He had better settle the question with the leaders of his own party. There are four, and one has already disappeared. Of the four, three have spoken; two of them are back benchers. They have delivered their speeches. Does the only one present represent the democracy of Great Britain? I suggest that the hon. Member should first of all settle his own differences with his own leaders. The speech of the hon. Member had nothing to do with this particular matter. The hon. Member talked about agricultural land. Agricultural land has nothing to do with this duty. The duty is concerned with a very small portion of amenity land, and the remission of the duty will make a very small difference to the Exchequer.

Mr. RAFFAN: £300,000 a year.

Mr. EVANS: When the hon. Member talks about the Solicitor-General's speeches being "disingenuous," his speech and the speeches that have been delivered to this Amendment are disingenuous, because they are used merely for political propaganda, in order to bolster up the statement made by several speakers that this Budget is a "rich man's Budget and has done nothing to relieve the poorer part of the community. As a matter of fact, he knows that this Budget has gone further than any Budget has gone for years in relieving taxation.

Mr. J. JONES: It is very interesting indeed to have the opportunity of hearing the speech that has just been delivered by the hon. Gentleman opposite. I was present on a deputation to-day to the butcher and not the block. We were appealing for assistance for people who were going through the mill of poverty and privation, because they are not able
to meet their taxation. We have had the burden of unemployment placed upon us to the extent of about 45 millions a year in 52 local authorities. We approached the Government to-day through its head, to ask for some assistance in this matter. We were told that although their sympathies were great, their possibilities were very small—their pockets were empty. "Good-morning. Mind the step!" and the interview was finished. Now we have one of the subalterns of the Government coming along telling us of a certain word—"disingenuous.' I do not know what it means. I have backed horses once or twice and I thank the hon. Member for his tip. But what are we discussing now? I am as near the mark as most of the speakers. We are discussing relief given to a certain proportion of our population in the matter of paying Income Tax and amenity land. I do not know what it means because I have got none. In my district we have our allotment. holders. They have to pay not at the rate of agricultural land in the country districts. They have to pay for their allotment at the rate that exists in the neighbourhood close to great industrial concerns and the value of their and is altogether out of proportion so far as land is concerned to the value of the land that may be circumscribed by a gentleman's park. Are we to understand that from the standpoint of taxation a farmer would have to pay Income Tax upon the full rent and value of his land whilst a gentleman who may be a successful pill-maker or a Yankee millionaire, who may happen to come into one of the most salubrious and beautiful districts of our country, will be able to get off at one-third of taxation. That is the point. I do not know much about finance. My knowledge of figures is limited by my knowledge of the figures of the street. I have been reading about it lately. A large proportion of some of the most valuable properties from the standpoint of amenity has been bought up by people from other countries who have become rich by exploitation in other countries and want to become aristocrats in this. I believe the House of Lords is to be reformed to make room for some of them.

The DEPUTY-CHAIRMAN (Sir Edwin Cornwall): The Amendment is limited. The discussion has become a little discursive.

Mr. JONES: I think I have said on the actual Amendment as much as most other Members. If a gentleman wants the use of land for his personal pleasure, why should he not pay as much as the man who has worked it for the public good in producing useful things? As far as we are concerned, we protest against this kind of differentiation. Those who cannot give relief in the matter of sugar, tea or beer—I am an internationalist in that particular respect—should see that they

Motion mage, and Question put "That the Clause stand part of the Bill."

are not giving privileges, if high taxation be necessary, to those who are best able to pay, and ought to stand by and pay the same as other sections of the community have more to pay under existing conditions.

Question put, "That the words proposed to be left out stand part of the Clause."

The Committee divided: Ayes, 132; Noes, 39.

Division No. 163.]
AYES.
[3.23 a.m.


Acland, Rt. Hon. Francis D.
Fremantle, Lieut.-Colonel Francis E.
Parker, James


Agg-Gardner, Sir James Tynte
Gee, Captain Robert
Pease, Rt. Hon. Herbert Pike


Amery, Rt. Hon, Leopold C. M. S.
Gibbs, Colonel George Abraham
Percy, Lord Eustace (Hastings)


Armitage, Robert
Gilmour, Lieut.-Colonel Sir John
Perkins, Walter Frank


Armstrong, Henry Bruce
God, Sir R. Park
Pollock, Rt. Hon. Sir Ernest Murray


Atkey, A. R.
Gould, James C.
Rae, Sir Henry N.


Baird, Sir John Lawrence
Green, Albert (Derby)
Raw, Lieutenant-Colonel Dr. N.


Baldwin, Rt. Hon. Stanley
Greene, Lt.-Col. Sir W. (Hack'y, N.)
Remer, J. R.


Balfour, George (Hampstead)
Greenwood, William (Stockport)
Richardson, Lt.-Col. Sir P. (Chertsey)


Barlow, Sir Montague
Guest, Capt. Rt. Hon. Frederick E.
Samuel, A. M. (Surrey, Farnham)


Barnett, Major Richard W.
Hacking, Captain Douglas H.
Samuel, Samuel (W'dsworth, Putney)


Barnston, Major Harry
Hannon, Patrick Joseph Henry
Sanders, Colonel Sir Robert Arthur


Bell, Lieut.-Col. W. C. H. (Devizes)
Harmsworth, C. B. (Bedford, Luton)
Sassoon, Sir Philip Albert Gustave D.


Betterton, Henry B.
Henderson, Lt.-Col. V. L. (Tradeston)
Scott, A. M. (Glasgow, Bridgeton)


Bigland, Alfred
Hennessy, Major J. R. G.
Scott, Sir Samuel (St. Marylebone)


Birchall, J. Dearman
Herbert, Dennis (Hertford, Watford)
Seely, Major-General Rt. Hon. John


Berwick, Major G. O.
Hinds, John
Shaw, William T. (Forfar)


Boscawen, Rt. Hon. Sir A. Griffith-
Hope, Sir H.(Stirling & Cl'ekm'nn, W.)
Shortt, Rt. Hon. E. (N'castle-on-T.)


Bowyer, Captain G. W. E.
Hope, Lt.-Col. Sir J. A. (Midlothian)
Smith, Sir Allan M. (Croydon, South)


Bridgeman, Rt. Hon. William Clive
Hopkins, John W. W.
Sprot, Colonel Sir Alexander


Briggs, Harold
Hopkinson, A. (Lancaster, Mossley)
Stanley, Major Hon. G. (Preston)


Broad, Thomas Tucker
Horne, Sir R. S. (Glasgow, Hillhead)
Steel, Major S. Strang


Brown, Brig.-Gen. Clifton (Newbury)
Jones, Henry Haydn (Merloneth)
Stephenson, Lieut.-Colonel H. K.


Buckley, Lieut.-Colonel A.
Kellaway, Rt. Hon. Fredk. George
Sturrock, J. Leng


Burgoyne, Lt.-Col. Sir Alan Hughes
Kidd, James
Sugden, W. H.


Camplon, Lieut.-Colonel W. R.
King, Captain Henry Douglas
Sutherland, Sir William


Carr, W. Theodore
Lane-Fox, G. R.
Sykes, Sir Charles (Huddersfield)


Casey, T. W.
Lindsay, William Arthur
Thomson, F. C. (Aberdeen, South)


Chamberlain, Rt. Hn. J. A. (Birm. W.)
Locker-Lampson, Com. O. (H'tingd'n)
Thomson, Sir W. Mitchell- (Maryhill)


Chamberlain. N. (Birm., Ladywood)
Mackinder, Sir H. J. (Camlachie)
Tryon, Major George Clement


Cockerill, Brigadier-General G. K.
Macpherson, Rt. Hon. James I.
Ward, William Dudley (Southampton)


Colfox, Major Wm. Phillips
Macquisten, F. A.
Waring, Major Walter


Cope, Major William
Manville, Edward
Watson, Captain John Bertrand


Davidson, J. C. C. (Hemet Hempstead)
Morden, Col. W. Grant
Wheler, Col. Granville C. H.


Dewhurst, Lieut.-Commander Harry
Moreing, Captain Algernon H.
White, Col. G. D. (Southport)


Doyle, N. Grattan
Morrison-Bell, Major A. C.
Wills, Lt.-Col. Sir Gilbert Alan H.


Edgar, Clifford B.
Murchison, C. K.
Windsor, Viscount


Edwards, Major J. (Aberavon)
Murray, Hon. A. C. (Aberdeen)
Winterton, Earl


Eyres-Monsell, Com. Bolton M.
Murray, Rt. Hon. C. D. (Edinburgh)
Wise, Frederick


Evans, Ernest
Murray, John (Leeds, West)
Wood, Sir J. (Stalybridge & Hyde)


Hides, Henry
Neal, Arthur
Young, Sir Frederick W. (Swindon)


FitzRoy, Captain Hon. Edward A.
Newman, Sir R. H. S. D. L. (Exeter)



Ford, Patrick Johnston
Nicholson, Brig.-Gen. J. (Westminster)
TELLERS FOR THE AYES.—


Forrest, Walter
Norris, Colonel Sir Henry G.
Colonel Leslie Wilson and Mr.


Foxcrott, Captain Charles Talbot
Ormsby-Gore, Hon. William
McCurdy.


Fraser, Major Sir Keith






NOES


Adamson, Rt. Hon. William
Halls, Waiter
Roberts, Frederick O. (W. Bromwich)


Ammon, Charles George
Hartshorn, Vernon
Royce, William Stapleton


Banton, George
Hayday, Arthur
Shaw, Thomas (Preston)


Barnes, Major H. (Newcastle, E.)
Henderson, Rt. Hon. A. (Widnes)
Sitch, Charles H.


Barrand, A. R.
Hirst, G. H.
Smith, W. R. (Wellingborough)


Bell, James (Lancaster, Ormskirk)
Holmes, J. Stanley
Spencer, George A.


Brown, James (Ayr and Bute)
John, William (Rhondda, West)
Sutton, John Edward


Davies, Evan (Ebbw Vale)
Jones, J. J. (West Ham, Slivertown)
Thorne, W. (West Ham, Plaistow)


Davies, Rhys John (Westhoughton)
Jones, Morgan (Caerphilly)
Waterson, A, E.


Edwards, C. (Monmouth, Bedwellty)
Lawson, John James
Watts-Morgan, Lieut.-Col. D.


Graham, D. M. (Lanark, Hamilton)
Lunn, William
Williams, Col. P. (Middlesbrough, E.)


Griffiths, T. (Monmouth, Pontypool)
Maclean, Neil (Glasgow, Govan)



Grundy, T. W.
Mills, John Edmund
TELLERS FOR THE NOES.—


Hall, F. (York, W. R., Normanton)
Parkinson, John Alien (Wigan)
Colonel Wedgwood and Mr. Raffan.

The Committee divided: Ayes, 131; Noes, 38.

Division No. 164.]
AYES
[3.30 a.m.


Acland, Rt. Hon. Francis D.
Fraser, Major Sir Keith
Parker, James


Agg-Gardner, Sir James Tynte
Fremantle, Lieut.-Colonel Francis E.
Pease, Rt. Hon. Herbert Pike


Amery, Rt. Hon. Leopold C. M. S.
Gee, Captain Robert
Percy, Lord Eustace (Hastings)


Armstrong, Henry Bruce
Gibbs, Colonel George Abraham
Perkins, Walter Frank


Atkey, A. R.
Gilmour, Lieut.-Colonel Sir John
Pollock, Rt. Hon. Sir Ernest Murray


Baird, Sir John Lawrence
Goff, Sir R. Park
Rae, Sir Henry N.


Baldwin, Rt. Hon. Stanley
Gould, James C.
Raw, Lieutenant-Colonel Dr. N.


Balfour, George (Hampstead)
Green, Albert (Derby)
Remer, J. R.


Barlow, Sir Montague
Greene, Lt.-Col. Sir W. (Hack'y, N.)
Richardson, Lt.-Col. Sir P. (Chertsey)


Barnett, Major Richard W.
Greenwood, William (Stockport)
Samuel, A. M. (Surrey, Farnham)


Barnston, Major Harry
Guest, Capt. Rt. Hon. Frederick E.
Samuel, Samuel (W'dsworth, Putney)


Barrand, A. R.
Hacking, Captain Douglas H.
Sanders, Colonel Sir Robert Arthur


Bell, Lieut.-Col. W C. H. (Devizes)
Hannon, Patrick Joseph Henry
Sassoon, Sir Philip Albert Gustave D.


Betterton, Henry B.
Henderson, Lt.-Col. V. L. (Tradeston)
Scott, A. M. (Glasgow, Bridgeton)


Bigland, Alfred
Hennessy, Major J. R. G.
Scott, Sir Leslie (Liverp'l, Exchange)


Birchall, J. Dearman
Herbert, Dennie (Hertford, Watford)
Seely, Major-General Rt. Hon. John


Borwick, Major G. O.
Hinds, John
Shaw, William T. (Forfar)


Boscawen, Rt. Hon. Sir A. Griffith-
Hope, Sir H. (Stirling & Cl'ckm'nn,W.)
Shortt, Rt. Hon. E. (N'castle-on-T.)


Bowyer, Captain G. W. E.
Hope, Lt.-Col. Sir J. A. (Midlothian)
Smith, Sir Allan M. (Croydon, South)


Bridgeman, Rt. Hon. William Clive
Hopkins, John W. W.
Sprot, Colonel Sir Alexander


Briggs, Harold
Hopkinson, A. (Lancaster, Mossley)
Stanley, Major Hon. G. (Preston)


Broad, Thomas Tucker
Horne, Sir R. S. (Glasgow, Hillhead)
Steel, Major S. Strang


Brown, Brig.-Gen. Clifton (Newbury)
Jones, Henry Haydn (Merioneth)
Stephenson, Lieut.-Colonel H. K.


Buckley, Lieut.-Colonel A.
Kellaway, Rt. Hon. Fredk. George
Sturrock, J. Lang


Burgoyne, Lt.-Col. Sir Alan Hughes
Kidd, James
Sugden, W. H.


Camplon, Lieut.-Colonel W. R.
King, Captain Henry Douglas
Sutherland, Sir William


Carr, W. Theodore
Lane-Fox, G. R.
Sykes, Sir Charles (Huddersfield)


Casey, T. W.
Lindsay, William Arthur
Thomson, F. C. (Aberdeen, South)


Chamberlain, Rt. Hn. J. A. (Birm., W.)
Locker-Lampson, Com. O. (H'tingd'n)
Thomson, Sir W. Mitchell- (Maryhill)


Chamberlain, N. (Birm., Ladywood)
Macpherson, Rt. Hon. James I.
Tryon, Major George Clement


Cockerill, Brigadier-General G. K.
Macquisten, F. A.
Ward, William Dudley (Southampton)


Colfox, Major Wm. Phillips
Malialleu, Frederick William
Waring, Major Walter


Cope, Major William
Manville, Edward
Watson, Captain John Bertrand


Davidson, J. C. C. (Hemel Hempstead)
Morden, Col. W. Grant
Wheler, Col. Granville C. H.


Dewhurst, Lieut.-Commander Harry
Morning, Captain Algernon H.
White, Col. G. D. (Southport)


Doyle, N. Grattan
Morrison-Bell, Major A. C.
Wills, Lt.-Col. Sir Gilbert Alan H.


Edge, Captain Sir William
Murchison, C. K.
Windsor, Viscount


Edwards, Major J. (Aberavon)
Murray, Hon. A. C. (Aberdeen)
Winterton, Earl


Eyres-Monsell, Com. Bolton M.
Murray, Rt. Hon. C. D. (Edinburgh)
Wise, Frederick


Evans, Ernest
Murray, John (Leeds, West)
Wood, Sir J. (Stalybridge & Hyde)


Fildes, Henry
Neal, Arthur
Young, Sir Frederick W. (Swindon)


FitzRoy, Captain Hon. Edward A.
Newman, Sir R. H. S. D. L. (Exeter)
TELLERS FOR THE AYES.—


Ford, Patrick Johnston
Nicholson, Brig.-Gen. J. (Westminster)
Colonel Leslie Wilson and Mr.


Forrest, Walter
Norris, Colonel Sir Henry G.
McCurdy.


Foxcroft, Captain Charles Talbot
Ormsby-Gore, Hon. William





NOES


Adamson, Rt. Hon. William
Hayday, Arthur
Royce, William Stapleton


Ammon, Charles George
Henderson, Rt. Hon. A. (Widnes)
Shaw, Thomas (Preston)


Banton, George
Hirst, G. H.
Sitch, Charles H.


Barnes, Major H. (Newcastle, E.)
Holmes, J. Stanley
Spencer, George A.


Bell, James (Lancaster, Ormskirk)
John, William (Rhondda, West)
Sutton, John Edward


Brown, James (Ayr and Bute)
Jones, J. J. (West Ham, Sivertown)
Thorne, W. (West Ham, Plaistow)


Davies, Evan (Ebbw Vale)
Jones, Morgan (Caerphilly)
Waterson, A. E.


Davies, Rhys John (Westhoughton)
Lawson, John James
Watts-Morgan, Lieut.-Col. D.


Edwards, C. (Monmouth, Bedwelity)
Lunn, William
Wedgwood, Colonel Josiah C.


Graham, D. M. (Lanark, Hamilton)
Maclean, Nell (Glasgow, Govan)
Williams, Col. P. (Middlesbrough, E.)


Grundy, T. W.
Mills, John Edmund



Hall, F. (York, W. R., Normanton)
Parkinson, John Allen (Wigan)
TELLERS FOR THE NOES.—


Halls, Walter
Raffan, Peter Wilson
Mr. T. Griffiths and Mr. Walter


Hartshorn, Vernon
Roberts, Frederick O. (W. Bromwich)
Smith.

Motion made, and Question proposed, "That the Chairman do report Progress, and ask leave to sit again."—[Sir R. Horne.]

Colonel WEDGWOOD: I think that the Government have treated us rather badly. For two hours their supporters discussed a Clause which was ultimately withdrawn, and thereby any Debate on the land Clause, which was the important Clause, has been postponed till three o'clock in the morning. Over that Clause we have fought for three-quarters of an
hour as against two hours on another Clause. In spite of the assertion of the Government that they were to get Clause 26 to-night and their decision at midnight that they were to get Clause 23, they now move to report Progress at a time when there are no trains to be caught. The Debate on the land Clause has been taken in the middle of the night and the other Clauses, in which we are not interested but only members of the Government's own party, are going to be taken to-morrow at the best time of the day. In the first place, the Government
was going to give us three days for the Committee stage. Last night they consented to give four days. If they go on at this pace, they will want five days. The Opposition, at any rate, are content to go on now. We are as fresh as ever we were, and hon. Members on the other side have been almost up to the standard of Members of the Opposition. There has been no lack of liveliness and no lack of cogent argument. Why should we be called upon to cease Debate just at the time when we are getting into our swing and when the Government can get the next seven Clauses without opposition? The people who have put down Amendments are not here to move them. If the Government want to give special consideration to their millionaire Friends who have put down Amendments, the Amendments can he taken on the Report stage. On the Report stage we will let the millionaires have it all to themselves if they will wash them out on the Committee stage. The hon. Member for Farnham (Mr. A. M. Samuel) is here, and he can move all these millionaire Clauses, and we can do what the Government and the Opposition set out to do—catch our trains in the morning at the right time.

Mr. N. MACLEAN: I want to join with my hon. and gallant Friend in appealing to the Chancellor of the Exchequer, or

rather to the Leader of the House, who, I see, is now in his place to withdraw the Motion to report Progress. There are several Amendments still upon the Order Paper, and we can with very little discussion divide upon these Amendments.

Sir R. HORNE: rose in his place, and claimed to move, "That the Question be now put."

Question put, "That, the Question be now put."

The Committee proceeded to a Division—

Mr. MACLEAN: On a point of Order.

The CHAIRMAN: If the hon. Member wishes to put a point of Order during a Division he must remain seated with his hat on.

Mr. MACLEAN: I want to protest against the action of the Government in moving to report Progress at this time-in the morning.

The CHAIRMAN: I must ask the hon. Member not to break the Rules of the House. I am responsible for the procedure. The Closure has been moved. I have accepted the Motion, and it is quite in order.

The Committee divided: Ayes, 128; Noes, 39.

Division No. 165.]
AYES
[3.43 a.m.


Agg-Gardner, Sir James Tynte
Cope, Major William
Hopkinson, A. (Lancaster, Mossley)


Amery, Rt. Hon. Leopold C. M. S.
Davidson, J. C. C. (Hemel Hempstead)
Horne, Sir R. S. (Glasgow, Hillhead)


Armitage, Robert
Dewhurst, Lieut.-Commander Harry
Jones, Henry Haydn (Merioneth)


Armstrong, Henry Bruce
Doyle, N. Grattan
Keliaway, Rt. Hon. Fredk. George


Atkey, A. R.
Edge, Captain Sir William
Kidd, James


Baird, Sir John Lawrence
Edwards, Major J. (Aberavon)
King, Captain Henry Douglas


Baldwin, Rt. Hon. Stanley
Evans, Ernest
Lane-Fox, G. R.


Balfour, George (Hampstead)
Eyres-Monsell, Com. Bolton M.
Lindsay, William Arthur


Barlow, Sir Montague
Fildes, Henry
Locker-Lampson, Com. O. (Hlingd'n)


Barnett, Major Richard W.
FitzRoy, Captain Hon. Edward A.
Macpherson, Rt. Hon. James I.


Barnston, Major Harry
Ford, Patrick Johnston
Macquisten, F. A.


Barrand, A. R.
Forrest, Walter
Malialleu, Frederick William


Bell, Lieut.-Col. W. C. H. (Devizes)
Foxcroft, Captain Charles Talbot
Manville, Edward


Betterton, Henry B.
Fraser, Major Sir Keith
Morden, Col. W. Grant


Bigland, Alfred
Fremantle, Lieut.-Colonel Francis E.
Moreing, Captain Algernon H.


Birchall, J. Dearman
Gee, Captain Robert
Morrison-Bell, Major A. C.


Borwick, Major G. O.
Gibbs, Colonel George Abraham
Murchison, C. K.


Boscawen, Rt. Hon. Sir A. Griffith
Gilmour, Lieut.-Colonel Sir John
Murray, Rt. Hon. C. (Edinburgh)


Bowyer, Captain G. W. E.
Goff, Sir R. Park
Murray, John (Leeds, West)


Bridgeman, Rt. Hon. William Clive
Gould, James C.
Neat, Arthur


Briggs, Harold
Green, Albert (Derby)
Newman, Sir R. H. S. D. L. (Exeter)


Broad, Thomas Tucker
Greenwood, William (Stockport)
Nicholson, Brig.-Gen. J. (Westminster)


Brown, Brig.-Gen. Clifton (Newbury)
Guest, Capt. Rt. Hon. Frederick E.
Norris, Colonel Sir Henry G.


Buckley, Lieut.-Colonel A.
Hacking, Captain Douglas H.
Parker, James


Burgoyne, Lt.-Col. Sir Alan Hughes
Hannon, Patrick Joseph Henry
Pease, Rt. Hon. Herbert Pike


Campion, Lieut.-Colonel W. R.
Henderson, Lt.-Col. V. L. (Tradeston)
Percy, Lord Eustace (Hastings)


Carr, W. Theodore
Hennessy, Major J. R. G.
Perkins, Walter Frank


Casey, T. W.
Herbert, Dennis (Hertford, Watford)
Pollock, Rt. H on. Sir Ernest Murray


Chamberlain, Rt. Hn. J. A. (Birm.,W)
Hinds, John
Rae, Sir Henry N.


Chamberlain, N. (Birm., Ladywood)
Hope,Sir H. (Stirling & Cl'ckm'nn'n,W.)
Raw, Lieutenant-Colonel Dr. N.


Cockerill, Brigadier-General G. K.
Hope, Lt.-Col. Sir J. A. (Midlothian)
Remer, J. R.


Colfox, Major Wm. Phillips
Hopkins, John W. W.
Richardson, Lt.-Col. Sir P. (Chertsey)


Robinson, S. (Brecon and Radnor)
Stanley, Major Hon. G. (Preston)
Watson, Captain John Bertrand


Samuel, A. M. (Surrey, Farnham)
Steel, Major S. Strang
Wheler, Col. Granville C. H


Samuel, Samuel (W'dsworth, Putney)
Stephenson, Lieut.-Colonel H. K.
Wills, Lt.-Col. Sir Gilbert Alan H.


Sanders, Colonel Sir Robert Arthur
Sturrock, J. Leng
Windsor, Viscount


Sassoon, Sir Philip Albert Gustave D.
Sugden, W. H.
Winterton, Earl


Scott, A. M. (Glasgow, Bridgeton)
Sutherland, Sir William
Wise, Frederick


Scott, Sir Leslie (Liverp'l, Exchange)
Sykes, Sir Charles (Huddersfield)
Wood, Sir J. (Stalybridge & Hyde)


Seely, Major-General Rt. Hon. John
Thomson, F. C. (Aberdeen, South)
Young, Sir Frederick W. (Swindon)


Shaw, William T. (Forfar)
Thomson, Sir W. Mitchell (Maryhill)



Shortt, Rt. Hon. E. (N'castie-on-T.)
Tryon, Major George Clement
TELLERS FOR THE AYES.—


Smith, Sir Allan M. (Croydon, South)
Ward, William Dudley (Southampton)
Colonel Leslie Wilson and Mr.


Sprot, Colonel Sir Alexander
Waring, Major Walter
McCurdy.


NOES.


Acland, Rt. Hon. Francis D.
Hartshorn, Vernon
Royce, William Stapleton


Adamson, Rt. Hon. William
Mayday, Arthur
Shaw, Thomas (Preston)


Ammon, Charles George
Henderson, Rt. Hon. A. (Widnes)
Sitch, Charles H.


Banton, George
Hirst, G. H.
Smith, W. R. (Wellingborough)


Barnes, Major H. (Newcastle, E.)
Holmes, J. Stanley
Spencer, George A.


Bell, James (Lancaster, Ormskirk)
John, William (Rhondda, West)
Sutton, John Edward


Brown, James (Ayr and Bute)
Jones, J. J. (West Ham, Silvertown)
Thorne, W. (West Ham, Plaistow)


Davies, Evan (Ebbw Vale)
Lawson, John James
Waterson, A. E.


Davies, Rhys John (Westhoughton)
Lunn, William
Watts-Morgan, Lieut.-Col. D.


Edwards, C. (Monmouth, Bedwellty)
Maclean, Nell (Glasgow, Govan)
Wedgwood, Colonel Josiah C.


Graham, D. M. (Lanark, Hamilton)
Mills, John Edmund
Williams, Col. P. (Middlesbrough, E.)


Grundy, T. W.
Parkinson, John Allen (Wigan



Hall, F. (York, W. R., Normanton)
Raffan, Peter Wilson
TELLERS FOR THE NOES.—


Halls, Walter
Roberts, Frederick O. (W. Bromwich)
Mr. T. Griffiths and Mr. Morgan




Jones.

Question put accordingly, "That the Chairman do report Progress, and ask leave to sit again."

The Committee proceeded to a Division—

Mr. NEIL MACLEAN: (seated and covered)
On a point of Order. Is it customary in the House in a Finance Bill Debate, particularly when there was an arrangement arrived at between the Opposition and the Government, and it was expected that a certain part of the Bill would be arrived at, to make a Motion to report Progress? Is it in order to report Progress when a member of the Opposition is asking the Government to give reasons why they move that Motion and thereby themselves breaking the agreement?

The CHAIRMAN: I am afraid I am unable to help the hon. Member, because it is not a point of Order on any question upon which I can give a ruling.

Mr. AMMON: (seated and covered)
Is it in order to move to report. Progress without giving any reason?

Mr. MILLS: (seated and covered)
Is it not customary for the Government to give an explanation of their reason for reporting Progress in view of the arrangement made?

The CHAIRMAN: It is not in order now to give any reasons.

The Committee divided: Ayes, 129; Noes, 38.

Division No. 166.]
AYES
[3.54 a.m.


Agg-Gardner, Sir James Tynte
Broad, Thomas Tucker
Ford, Patrick Johnston


Amery, Rt. Hon. Leopold C. M. S.
Brown, Brig.-Gen. Clifton (Newbury)
Forrest, Walter


Armitage, Robert
Buckley, Lieut.-Colonel A.
Foxcroft, Captain Charles Talbot


Armstrong, Henry Bruce
Burgoyne, Lt.-Col. Sir Alan Hughes
Fraser, Major Sir Keith


Atkey, A. R.
Campion, Lieut.-Colonel W. R.
Fremantle, Lieut.-Colonel Francis E.


Baird, Sir John Lawrence
Carr, W. Theodore
Gee, Captain Robert


Baldwin, Rt. Hon. Stanley
Casey, T. W.
Gibbs, Colonel George Abraham


Balfour, George (Hampstead)
Chamberlain, Rt. Hn. J. A. (Birm., W.)
Gilmour, Lieut.-Colonel Sir John


Barlow, Sir Montague
Chamberlain, N. (Birm., Ladywood)
Goff, Sir R. Park


Barnett, Major Richard W.
Cockerill, Brigadler-General G. K.
Gould, James C.


Barnston, Major Harry
Colfox, Major Wm. Phillips
Green, Albert (Derby)


Barrand, A. R.
Cope, Major William
Greenwood, William (Stockport)


Bell, Lieut.-Col. W. C. H. (Devizes)
Davidson, J. C. C. (Hemel Hempstead)
Guest, Capt. Rt. Hon. Frederick E.


Betterton, Henry B.
Dewhurst, Lieut.-Commander Harry
Hacking, Captain Douglas H.


Bigland, Alfred
Doyle, N. Grattan
Hannon, Patrick Joseph Henry


Birchall, J. Dearman
Edge, Captain Sir William
Henderson, Lt.-Col. V. L. (Tradeston)


Berwick, Major G. O.
Edwards, Major J. (Aberavon)
Hennessy, Major J. R. G.


Boscawen, Rt. Hon. Sir A. Griffith-
Evans, Ernest
Herbert, Dennis (Hertford, Watford)


Bowyer, Captain G. W. E.
Eyres-Monsell, Com. Bolton M.
Hinds, John


Bridgeman, Rt. Hon. William Clive
Fildes, Henry
Holmes, J. Stanley


Briggs, Harold
FitzRoy, Captain Hon. Edward A.
Hope, Sir H. (Stirling & cl'ckm'nn,w.)


Hope, Lt.-Col. Sir J. A. (Midlothian)
Norris, Colonel Sir Henry G.
Steel, Major S. Strang


Hopkins, John W. W.
Parker, James
Stephenson, Lieut.-Colonel H. K.


Hopkinson, A. (Lancaster, Mossley)
Pease, Rt. Hon. Herbert Pike
Sturrock, J. Leng


Horne, Sir R. S. (Glasgow, Hillhead)
Percy, Lord Eustace (Hastings)
Sugden, W. H.


Jones, Henry Haydn (Merioneth)
Perkins, Walter Frank
Sutherland, Sir William


Kelllaway, Rt. Hon. Fredk. George
Pollock, Rt. Hon. Sir Ernest Murray
Sykes, Sir Charles (Huddersfield)


Kidd, James
Rae, Sir Henry N.
Thomson, F. C. (Aberdeen, South)


King, Captain Henry Douglas
Raw, Lieutenant-Colonel Dr. N.
Thomson, Sir W. Mitchell- (Maryhill)


Lane-Fox, G. R.
Ramer, J. R.
Tryon, Major George Clement


Lindsay, William Arthur
Richardson, Lt.-Col. Sir P. (Chertsey)
Ward, William Dudley (Southampton)


Locker-Lampoon, Com. O. (H'tlngd'n)
Robinson, S. (Brecon and Radnor)
Waring, Major Walter


Macpherson, Rt. Hon. James I.
Samuel, A. M. (Surrey, Farnham)
Watson, Captain John Bertrand


Macquisten, F. A.
Samuel, Samuel (W'dsworth, Putney)
Whaler, Col. Granville C. H.


Mallalieu, Frederick William
Senders, Colonel Sir Robert Arthur
Wills, Lt.-Col. Sir Gilbert Alan H.


Manville, Edward
Sassoon, Sir Philip Albert Gustave D.
Windsor, Viscount


Morden, Col. W. Grant
Scott, A. M. (Glasgow, Bridgeton)
Winterton, Earl


Moreing, Captain Algernon H.
Scott, Sir Leslie (Liverp'l, Exchange)
Wise, Frederick


Morrison-Bell, Major A. C.
Seely, Major-General Rt. Hon. John
Wood, Sir J. (Stalybridge & Hyde)


Murchison, C. K.
Shaw, William T. (Forfar)
Young, Sir Frederick W. (Swindon)


Murray, Rt. Hon. C. D. (Edinburgh)
Shortt, Rt. Hon. E. (N'castle-on-T.)



Murray, John (Leeds, West)
Smith, Sir Allan M. (Croydon, South)
TELLERS FOR THE AYES.—


Neal, Arthur
Sprot, Colonel Sir Alexander
Colonel Leslie Wilson and Mr.


Newman, Sir R. H. S. D. L. (Exeter)
Stanley, Major Hon. G. (Preston)
McCurdy.


Nicholson, Brig.-Gen. J. (Westminster)




NOES


Acland, Rt. Hon. Francis D.
Hartshorn, Vernon
Royce, William Stapleton


Adamson, Rt. Hon. William
Hayday, Arthur
Shaw, Thomas (Preston)


Ammon, Charles George
Henderson, Rt. Hon. A. (Widnes)
Sitch, Charles H.


Banton, George
Hirst, G. H.
Spencer, George A.


Barnes, Major H (Newcastle, E.)
John, William (Rhondda, West)
Sutton, John Edward


Bell, James (Lancaster, Ormskirk)
Jones, J. J. (West Ham, Silvertown)
Thorne, W. (West Ham, Plaistow)


Brown, James (Ayr and Bute)
Jones, Morgan (Caerphilly)
Waterson, A. E.


Davies, Evan (Ebbw Vale)
Lawson, John James
Watts-Morgan, Lieut.-Col. D.


Davies, Rhys John (Westhoughton)
Lunn, William
Wedgwood, Colonel Josiah C.


Edwards, C. (Monmouth, Bedwelity)
Maclean, Nell (Glasgow, Govan)
Williams, Col. P. (Middlesbrough, E.)


Graham, D. M. (Lanark, Hamilton)
Mills, John Edmund



Grundy, T. W.
Parkinson, John Allen (Wigan)
TELLERS FOR THE NOES.—


Hall, F. (York, W.R., Normanton)
Raffan, Peter Wilson
Mr. T. Griffiths and Mr. Walter


Halls, Walter
Roberts, Frederick O. (W. Bromwich)
Smith.

Committee report Progress; to sit again To-morrow.

The remaining Orders were read, and postponed.

It being after half-past Eleven of the clock upon Tuesday evening, Mr. DEPUTY-SPEAKER adjourned the House, without Question put, pursuant to Standing Order.

Adjourned at Four o'Clock a.m.